A claim for repairs and maintenance is fully deductible in the year the cost occurred.
However be carful because there is a fine line between ‘repairs and maintenance’ and ‘replacement of old with new’.
A replacement of old with new is classed as an new asset / improvement and will need to be depreciation over a number of years depending on its effective life determined by the ATO.
Examples:
You replace the kitchen. This is not repairs and maintenance. This is an improvement.
You replaced the ducted air-condition unit. This is not repairs and maintenance. This is an improvement.
What you can claim
You can claim expenses from allowable repairs, maintenance or replacement, including:
- painting
- conditioning gutters
- maintaining plumbing
- repairing electrical appliances
- mending leaks
- replacing broken parts of fences or broken glass in windows
- repairing machinery.
What you can’t claim
You can’t claim capital expenses, such as:
- substantial improvements to an item or property – for example, installing a new ceiling or kitchen.
- repairs made to machinery, tools or property immediately after you purchase or acquire them – this is because the price you paid reflects the item’s condition.