1 Are the costs you incurred in the 20XX - 20XX financial year to conduct repairs at 'the XXXX' deductible under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Yes - these expenses were incurred at a time the rental property was tenanted or is considered to have been genuinely available for rent. Question 2 Are the costs you incurred in the 20XX - 202XX financial year to conduct repairs to the XXXX, while it was uninhabitable and untenanted, deductible under section 8-1 of the ITAA 1997? Answer No. This private ruling applies for the following period: 1 July 20XX to 30 June 20XX 1 July 20XX to 30 June 20XX The scheme commenced on: 1 July 20XX
Your partner passed away on X September 20XX. The XXXX was passed to you per the deceased's will. The estate had been incurring the costs of repairs and related expenses to maintain the XXXX, which was tenanted at the time. In May 20XX, the tenants moved out of the XXXX due to ongoing issues that required repair. The work conducted at the XXXX to establish it as habitable include: • General repairs • The purchase and installation of water tank and accessories • Pest inspection and control • Supply and installation of advanced blower system • Installation of water filter • Land crusher • Crusher dust • Supply, delivery, and application of granite • Electrical works • Antenna supply and repairs • Tree removal services • Pressure pump repairs • Cleaning services • Sewerage system design. The Estate advised you that they would no longer incur the expenses relating to the rental XXXX. You incurred the total cost of repairs. Some of the incurred costs occurred in the 20XX-20XX financial year. The remainder of the incurred costs occurred in the 20XX-20XX financial year.
The XXXX was vacant at the time of the remainder of repairs and not fit for tenancy until they were completed. The XXXX was not habitable until December 20XX. You were able to rent the XXXX out in May 20XX through a private rental agreement.
Income Tax Assessment Act 1997 section 8-1 Income Tax Assessment Act 1997 section 25-10 Summary Expenses relating to a rental property are allowable as deductions, but only for the period the property was rented or genuinely available for rent. Detailed reasoning Under section 8-1 of the ITAA 1997 you can claim a deduction for losses and outgoings which are incurred in the course of gaining or producing assessable income, unless the losses or outgoings are of a capital, private or domestic nature. Section 25-10 of the ITAA 1997 outlines that you can deduct expenditure you incur for repairs to premises (or part of a premises) or a depreciating asset that you held or used solely for the purpose of producing assessable income. The term 'repair' means the remedying or making good of defects in