Rental Properties – Claiming Repairs

You cannot claim the cost of repairing defects, damage or deterioration that existed when you obtained the property, even if you carried out these repairs to make the property suitable for renting. This is because these expenses relate to the period before the property became an income-producing property.

Stephen needed to do some repairs to a rental property he recently purchased before the first tenants moved in. He paid trades-people to repaint dirty walls, replace broken light fittings and repair doors on two bedrooms.

He also had to have the house treated for damage by white ants. Because Stephen incurred these expenses to make the property suitable for rental, not while he was using the property to generate rental income, the expenses are capital expenses.

This means he cannot claim a deduction for them.

(ATO, 2013)