When money is spent on a property it creates a tax deduction in one of two ways. If the expenditure is a “repair” the amount is generally tax deductable when it is spent. If the expenditure is replacement or new work, the expenditure is deductable over the life of the item.

Different items are depreciated over different periods. Your accountant or a depreciation specialist will prepare a schedule for your items.

The amounts are considerable and if you are not claiming now you should speak to your advisor.

Our Take Home Message: Be careful how work orders and invoices are worded at the time work is done if you believe the work is a repair.