The cost of repairs and maintenance may be deductible in full in the year you incur them if:
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the expense directly relates to wear and tear or other damage that occurred as a result of renting out your property, and
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the property:
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continues to be rented on an ongoing basis, or
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remains available for rent but there is a short period when the property is unoccupied, for example, where unseasonable weather causes cancellations of bookings or advertising is unsuccessful in attracting tenants.
Initial repairs
Costs you incur to remedy defects, damage or deterioration that existed at the time you acquired the property are considered to be capital in nature. These may be classified as capital works or capital allowances, dependant on what the expenditure was for.
Improvement:
An improvement is considered anything that makes an aspect of the property better, more valuable or more desirable, or changes the character of the item on which works are being carried out. Improvements can be either capital works where it is a structural improvement or capital allowances where the item is a depreciable asset.
