Repair or replacement

[investemptress]

brick fence at the front of the property is only 2-3 bricks high with brick piers at either end. . About ten years ago there were bricks as high as 80 cm all the way along and over the years theyve been broken, knocked off, by tenants, vandals, old age etc..

If I replace this with a wooden picket fence is this a repair or replacement, ie can I write it off if I build it myself for less than $300 or does it have to be depreciated? or is it treated as capital improvment which gets depreciated?

 

[depreciator]

It's an 'improvement'. You're electing to put in a different type of fence i.e. not restore the one that is there to the condition it was in when you bought the place.
Scott

 

[Francesco]

IMO the material expenses being only $300 should be written off immediately in the year it occurred.

ATO guidelines:
http://www.ato.gov.au/individuals/content.asp?doc=/content/22711.htm&page=1

http://www.ato.gov.au/individuals/content.asp?doc=/content/15917.htm

http://www.ato.gov.au/individuals/content.asp?doc=/content/25229.htm

 

[Corsa]

Dear Investemptruss/Team

Francesco is correct, given the expense is $300 or below then they will be immediately deductible in the tax year incurred.

Best Wishes

Corsa

 

[Rob G.]

Ummmm ....

If the fence is "replaced" then it sounds like a capital expense.

The fence falls under Div 43 Capital Works as an article attached to the land.

The $300 only exemption for capital expenses I am aware of only applies to Div 40 depreciable assets.

Cheers,

Rob

 

[depreciator]

Yep, a replacement of the entire fence - especially when the type of fence is changed - is a capital expense i.e. 2.5%pa.

If you elect to bring the existing brick fence back to the condition it was in when you bought the place, that would be a repair.

And yep, the 'under $300' thing applies to Assets e.g. a curtain, an exhaust fan, a heater, a rangehood etc.

Scott

 

[Corsa]

I had another close look and Depreciator is correct.

 

[investemptress]

capital works or depreciate fence

thanks for your great advice, we werent sure.. much appreciated.