Rental Property: Repairs vs Improvements (2025-26)

Published February 2026 Last updated February 2026

Last reviewed:

Primary tax-year context: 2025-26

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General information only. Speak with a registered tax agent for advice.

Repairs generally restore existing function, while improvements usually enhance or replace substantially, often requiring capital treatment. Misclassification is a common adjustment area.

Practical approach

  • Identify whether work restores or upgrades
  • Split mixed invoices where needed
  • Document why each amount is immediate or capital

Sources (verified)

Next step

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Understand the rules

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