What counts as a repair – the trick question

When is a repair expense a repair and not a capital improvement

A repair is allowable as an expense against your rental income whereas a capital improvement is not, so distinguishing between the two is very important

Repair means the restoration of an asset by replacing subsidiary parts of the whole asset. An example would be the cost of replacing tiles on a roof blown away by the wind. There won’t be  a repair if a significant improvement of the asset beyond its original condition is the end result. For instance if the taxpayer takes off the roof and builds on another storey to his house, then this is an improvement

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