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Is the taxpayer allowed a deduction for capital write-off, for costs incurred in painting a newly acquired rental property, under Division 43 of the Income Tax Assessment Act 1997 (ITAA 1997)?

No. The taxpayer is not allowed a deduction for a capital write-off, for costs incurred in painting a newly acquired rental property, under Division 43 of the ITAA 1997.

The taxpayer purchased a rental property which required internal painting at the time of purchase. After settlement, but before the first tenant moved in, the taxpayer had the property repainted.

Section 43-20 of the ITAA 1997 contains a list of capital works that are eligible for capital write-off. The list includes alterations or improvements.

Where an item which has an existing painted finish is repainted, this is not regarded as constituting an alteration or structural improvement. Painting in this instance has the purpose of remedying defects in the existing paintwork. Therefore, the cost of painting would not be included in the list of capital works write offs under the provisions of Division 43 of the ITAA 1997.