Can I claim for repainting my whole investment property?

Question from Mike updated on 21st August 2009:

I have owned an investment property for 5 years, and I now want to paint the entire house/roof. I would like to know if I can claim for the full amount, as I am not painting the house in order to sell it, but rather I am just replacing the paint which has gradually worn away over time. Thanks very much. Mike.

Our expert Mark Withers responded:

Your question centres around the difference between capital improvements which are non deductible and repairs and maintenance which are. Generally, expenditure which maintains an asset in a conditon that allows it to continue to be "fit for purpose" will be deductible as repairs. I suspect your painting will be just that. If assets are improved , altered or substantially upgraded the costs are likely to be capital.

It is typically a question of extent and degree. The timing can be relevant, eg if you buy a run down property then do it up the costs are dilapidation repairs which will be capital because the price you paid reflected the condition the building was in. Deductible repairs would generally make good wear and tear caused by tenants rather than remedy problems that were pre existing at acquisition.

Mark Withers and his team at Withers Tsang & Co specialise in advising on property related transactions, valuation and restructure services and tax planning.



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