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Daffodil26(Enthusiast)Enthusiast
26 Mar 2024

Hi. I'm sure this topic has been covered before but I've struggled to find a straight answer.The 125 litre Rheem electric hot water tank died recently in our rental unit.The plumber came in and removed and disposed of it and replaced it with the current same size model from Rheem. No pipework or electric wiring had to be replaced.I'm not sure if an electric hot water tank is categorized as an appliance or a plumbing fixture? In any case I'm curious to know if the ATO would regard our unavoidable costs in this instance as repairs and maintenance or capital expenditure? Thanks in advance for any advice!

9,695 views
9 replies
9,695 views
9 replies

Most helpful response

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DanielleATO(Community Support)Community Support
28 Mar 2024

Hi @Daffodil26,


Yeah of course. 😊


Your new hot water cylinder is a depreciating asset. It falls under capital allowances. [updated by moderator to reflect accurate info 7/11/2024]

Liked by Daffodil26
Daffodil26(Enthusiast)Enthusiast
31 Mar 2024

many thanks for the advice Danielle. I will put the total cost of the HWS replacement as Repairs & Maintenance in rental expenses and forget about depreciating anything.

bandoltouch(I'm new)I'm new
21 Oct 2024

Hi @DanielleATO

I have the exact question that Daffodil26 has posted, relating to a hot water system in my rental property was leaking and the only option advised by the plumber was to replace. Apologies for asking the same question but is this 'repairs and maintenance' or "capital works"?

My accountant refuse to consider my case as a 'repairs and maintenance' even though I cited your advice or response in this post. Are you able to definitely confirm once more?

Thanks in advance

Most helpful replyATO Certified Response

AnitaATO(Community Support)Community Support
ATO Certified Response21 Oct 2024

Hi @bandoltouch,


We've reviewed this and your accountant is correct. This isn't a repair.


Your new hot water cylinder falls under capital allowances. It's a depreciating asset claimed over time.


Check out rental properties - repairs, maintenance and capital expenditure for more info. [updated by moderator to reflect accurate info 7/11/2024]

AriATO(Community Support)Community Support
6 Nov 2024

Hi @Daffodil26 and @bandoltouch


Looks like we didn't get it right with this one!


We've updated our previous responses. Our apologies for any inconvenience.

Girl58100(Newbie)Newbie
25 May 2025

Are there exceptions if the value is small, say $1300?

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Can i claim an immediate deduction for a replacement electric hot water tank in my rental property? | ATO Community