investors often worry about ongoing repairs and maintenance costs however these
concerns can often be reduced by claiming back these costs when completing a
claiming deductions, it is necessary for investors to understand the difference
between claiming repairs and maintenance vs. capital improvements.
Australian Taxation Office (ATO) defines repairs as work completed to fix
damage or deterioration of a property, for example replacing part of a damaged
deduction cost paid to repair a rental property can be claimed as an immediate
100% deduction in the year the expense is incurred.
is defined as work completed to prevent deterioration to a property, for
example mowing the lawns.
Costs for maintenance of a rental property can also be claimed as an immediate
deduction in the year the expense is paid.
the condition or value of an item beyond its original state at the time of
purchase is defined as a capital improvement.
are classified as either capital works deductions or plant and equipment and
must be depreciated over time.
works deductions include renovations such as adding an internal wall and also
includes items that cannot easily be removed from the property.
and equipment items include removable items such as carpet and hot water
enjoy an arm’s length relationship with their tenants and at the same time,
maintaining a professional veneer as a landlord.
have the added advantage of time and date stamped interactions.
RealRenta Tenants can submit all maintenance requests via the Platform and
upload all necessary photos and documentation.
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Thursday, 25 June 2020