Is House Painting Tax Deductible?

Painting your house, rental or not, can be costly. There are ways you can reduce house painting costs for tax purposes. Homeowners earning a rental income are entitled to claim deductions for repair work or the cost of any maintenance.
But how and when can you claim a tax deduction when it’s just house painting? Let’s find out.
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Do You Get Tax Deductions on House Painting?

Unfortunately, house painting doesn’t have any tax benefits for properties. Specifically houses that lack capital gains or have any means of rental income from the rental market. Much like home repairs, house painting is not tax-deductible. This is because it is considered a personal expense versus capital expenditure.
However, several conditions allow tax depreciation for expenses found after painting your home. You can include the house painting cost in your annual tax return once you sell your home.  
Also known as a capital improvement, this is an effective way to get tax deductions on house painting when you’re just about to sell your property.

Can Property Investors Claim Tax Deductions for House Painting?

Yes, property owners can claim deductions for painting a rental property. The amount of money you spend on a fresh coat of paint may be deducted from your annual tax filing under the following clauses:
  • Capital improvements
  • Repairs and maintenance
  • Property management
And whilst all allow tax deduction on a rental property, the Australian Tax Office maintains a separate set of guidelines for each. It’s best to speak to your accountant before filing any claims. 

What is Capital Improvement?

It’s common for property owners to claim a tax deduction for alterations or additions made to a property in the form of capital improvement. Any structural additions inside and outside the property, a new home system, landscaping, or newly installed insulation are considered capital improvements.

A painting job is part of a capital improvement project and will automatically be covered in the total cost base. Unfortunately, painting your rental space to increase its capital value is still not considered tax-deductible.
The only circumstance wherein house painting can be included in capital improvement is when the house is burned down. This also includes most other natural disasters. In this situation, the homeowner is forced to restore the property to its original condition

Can You Get Immediate Deductions for Repairs and Maintenance?

Any investment property with income-producing ability is eligible for tax deduction as long as it is habitable.
From a commercial office to a holiday rental, a paint job can ensure your rental property remains well-maintained. As a result, any paint job that helps prevent deterioration or repair imperfections in a rental property can be claimed immediately. You can include the repair costs in the same financial year, including costs associated with polishing surfaces or applying a fresh coat of paint.
The cost of repair and maintenance may be deductible in full if the cost incurred is solely for repair purposes. Additionally, to be a deductible expense, the property must either:
  • Continue to be advertised as a rental property 
  • Continue to be rented on an ongoing basis
  • Continue to be available for rent despite cancellations

What About Property Improvements?

Property improvements, such as adding wall partitions, doors, windows, or repainting a fence, are aimed at increasing the value of your home. But even in the context of a rental property, you cannot claim any deduction for home improvements in the same year you incur these costs.
However, the costs associated with home improvements are eligible for a capital works deduction claim. The ATO also allows investors with income-producing properties, like rental property,  to claim depreciation as a tax deduction. The cost of installing new cabinets or repainting doors and windows can be claimed under capital allowances.

What Other Claims Can You Make Under Capital Works Deductions?

It’s important to note that there are certain instances when you cannot claim tax deductions for repairs done on a rental property. Like when you’re replacing an entire structure such as a fence or initial repairs for defects that existed when you acquired the property.
The exceptions to this rule include renovating it into a home office setup. In this case, repainting a home office can be considered a business expense. Note that when you repaint an entire house, the tax deduction only corresponds to the area that’s part of your home office.

Key Takeaways

Ready to Paint?

Once you have spoken to your accountant and understand what you can and can’t claim at tax time, why not contact us?

Hunter Coast Painting can handle all aspects of your next painting project, from residential to commercial. Our team of professional residential painters offer a range of painting services in Newcastle and Lake Macquarie. Request a free quote today – contact Hunter Coast Painting and talk to an expert.

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Gavin Kane

Gavin, is the founder and director of Hunter Coast Painting who are experienced Newcastle Painters. Combining 10 years experience in the industry and having worked on multi-million dollar homes in Europe and Australia, Gavin is able to provide a wealth of knowledge and experience.

Gavin Kane
Gavin Kane

Gavin, is the founder and director of Hunter Coast Painting.

Combining 10 years experience in the industry and having worked on multi-million dollar homes in Europe and Australia, Gavin is able to provide a wealth of knowledge and experience.