The difference between Repair, Maintenance, and Capital Improvement
Unsure what the difference between repairs, maintenance and capital improvement are, with your investment property?
- Repairs are considered work completed to fix damage or deterioration of a property, for example replacing part of a damaged fence.
- Maintenance is considered work completed to prevent deterioration to a property, for example oiling a deck.
- A Capital Improvement occurs when the condition or value of an item is enhanced beyond its original state at the time of purchase. This must then be classified as either a capital works deduction and depreciated over time or as plant and equipment depreciation. An example of a capital works deductions could be replacing the kitchen cupboards. If any plant and equipment items are removed and replaced, for example an air conditioner, this will also be considered a capital improvement.
Investors considering completing any work to their property should contact a specialist Quantity Surveyor for advice before they start work.
If you have any questions, or need clarification on any of the above, please contact Anna Marten, our Head of Property Management, on 9651 1666 or firstname.lastname@example.org.
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