Repairs and Maintenance Vs New Asset Improvement

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.


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.

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