Repairs vs improvements
5 min read · 2025-01-15
A repair restores something to its previous condition (deductible); an improvement makes it better than before (capital, only relievable against future gains).
- Repairs: deductible from rental income in the year you pay
- Improvements: capital — added to the property's cost basis for CGT
- Like-for-like replacement is usually a repair, even with a small upgrade due to modern equivalents
- Major upgrades (e.g. extensions, new kitchen with extra units) are capital