Question about a fence
An investment property owner has had a new fence built on his rental property and asks whether he ...
An investment property owner has had a new fence built on his rental property and asks whether he can claim a deduction for the new fence.
The question is: Was the fence constructed for the purpose of carrying out a repair or is it an improvement to the property? Even the definition of ‘repair’ can be unclear.
In general terms, however, repair work relates directly to wear and tear, is a replacement of a worn out or broken part, restores something to its former condition and remains functionally the same; whereas an improvement changes character or functionality or is a restoration of substantial proportion.
If the fence was constructed to repair damage or wear and tear that has occurred since the property had been rented out, then a deduction is appropriate.
However, this would be an unlikely outcome if the new fence is of a different material to the old one, an addition to the existing fence line, or repair to a fence that was already damaged at purchase date of the property.
From this you will see how vitally important it is to get expert advice on such matters. Your property investment manager can suggest where questions such as this should be directed.