{"id":5562,"date":"2015-08-21T16:35:29","date_gmt":"2015-08-21T06:35:29","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=5562"},"modified":"2015-08-21T16:35:29","modified_gmt":"2015-08-21T06:35:29","slug":"dont-get-into-hot-water-with-claims","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/dont-get-into-hot-water-with-claims\/","title":{"rendered":"Don\u2019t get into hot water with claims"},"content":{"rendered":"

Repairs and maintenance or capital improvements?<\/b>
\nConcerns about the cost of repairs and ongoing maintenance for an owner\u2019s investment property can be reduced by claiming back these costs when an investor is completing their tax return. Before an investor can start to tally deductions, it is necessary to understand the difference between claiming repairs, maintenance and capital improvements.
\nRepairs and maintenance<\/b>
\nWork completed to fix damage or deterioration of a property is defined as repairs, e.g. fixing part of a damaged fence.
\nWork completed to prevent deterioration to a property is defined as maintenance, e.g. servicing an air conditioner.<\/i>
\nA deduction for expenses incurred because of repairs or maintenance on an investment property can be claimed completely within the current financial year.
\nCapital improvements<\/b>
\nImproving the condition or value of an item beyond its original state at the time of purchase is defined as capital improvements. Capital improvements must be depreciated or claimed as capital works deductions over time. Capital improvements are classified as either capital works deductions or plant and equipment. Capital works deductions include structural additions and renovations such as adding and extending an internal wall and also includes items fixed to the property which cannot easily be removed. Plant and equipment items include removable or mechanical items such as carpet, hot water systems and stoves.
\nTo determine how expenses on an investment property should be claimed, an investor can consider the following questions:
\nHas the property or item been improved beyond its original condition at the time of purchase?<\/b>
\nIf an item provides something new or changes the character of the original item in any way, it will be considered a capital improvement.
\nWas the asset partially replaced, or replaced entirely?<\/b>
\nPartially replacing an item due to damage or wear and tear is classified as repairs and maintenance. If an owner decides to replace the entire item to improve the property\u2019s value, it will be considered a capital improvement.
\nA BMT Tax Depreciation Schedule will only include items classified as capital improvements. Repairs and maintenance can be separately claimed as a 100% deduction with an Accountant when an investor is completing their tax return.
\nBMT can answer questions about alterations, additions, repairs or improvements and the implications they may have on depreciation.
\nThis article originally appeared online at <\/b>www.bmtqs.com.au\/maverick\/mav-33-repairs-and-maintenance<\/b><\/a>
\nArticle provided by BMT Tax Depreciation. <\/b>
\nBradley Beer<\/b> (B. Con. Mgt, AAIQS, MRICS) is the Chief Executive Officer of BMT <\/b>Tax Depreciation.
\nPlease contact 1300 728 726 or visit\u00a0www.bmtqs.com.au<\/a> for an Australia wide service.<\/b><\/p>\n","protected":false},"excerpt":{"rendered":"

Repairs and maintenance or capital improvements? Concerns about the cost of repairs and ongoing maintenance for an owner\u2019s investment property can be reduced by claiming back these costs when an investor is completing their tax return. Before an investor can start to tally deductions, it…<\/p>\n","protected":false},"author":176692471,"featured_media":5563,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5,25],"tags":[],"class_list":["post-5562","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bmt","category-sponsored-channels"],"yoast_head":"\nDon\u2019t get into hot water with claims - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/dont-get-into-hot-water-with-claims\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Don\u2019t get into hot water with claims - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"Repairs and maintenance or capital improvements? Concerns about the cost of repairs and ongoing maintenance for an owner\u2019s investment property can be reduced by claiming back these costs when an investor is completing their tax return. 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