Tax and property – spotlight on repairs & maintenance
When it comes to repairs and maintenance on a rental property knowing what can and can’t be claimed can be tricky.
Example scenario:
Sam owns a rental property that was rented out for 33 weeks of the 2023 financial year. The tenants moved out in October 2022 and Sam found that the kitchen needed some repairs before it could be rented again.
Sam decided to move into the property in order to complete most of the repairs herself and lived there from November 2022 to May 2023.
The repairs in total came to $10,628 – can they be claimed in this instance?
Answer:
Rental expenses like these can be claimed as long as the property is rented or available to be rented. In this case because Sam was living in the property it wasn’t available to rent, even though she intended it to be rented again in the future.
An argument could be made that it was only temporarily unavailable however because it was unavailable for 7 months it’s most likely IRD will consider the rental activity for this property to have ceased until it is again able to be rented.
So in this example it’s unlikely those repairs and maintenance expenses will be accepted.
Contact us if you have any questions about your rental related expenses.