I've had a burst hot water service that was irreparable. I've replaced it with a brand new one. How do I account for this in my tax return? Is it considered repairs and maintenance as the old one was clearly broken, or is it a capital expenditure? It was not done to add value to my property and clearly I couldn't leave the tenant with cold water.
Happy to help! In this case you can consider it a repair and make a claim in full.
Exactly like you said, you can't leave the tenants with cold water. I reckon they'll be especially wanting hot water in this cold winter. Well, it's rather chilly where I am.
If you'd made upgrades like installing solar to the hot water system, that'd be different.
You needed to keep the property in a tenantable condition, so this is a claim you can make now.
Happy to help! In this case you can consider it a repair and make a claim in full.
Exactly like you said, you can't leave the tenants with cold water. I reckon they'll be especially wanting hot water in this cold winter. Well, it's rather chilly where I am.
If you'd made upgrades like installing solar to the hot water system, that'd be different.
You needed to keep the property in a tenantable condition, so this is a claim you can make now.
I don't think this is the case. I think it's a depreciating asset. @NikkiATO @RachelATO - can someone double check this, I think Steve confused pipes for a hot water and hot water system.
Hi @YellowPotato,
I'm happy to jump in here.
I can't speak to what the rules outlined in July 2024, as things may have changed since then but you're correct.
Based on the original question, they wouldn't be able to claim it as a repair as it's generally considered a capital expense because the entire asset needed replacing.
Depreciating assets are usually:
Unless the depreciating asset was under $300 then it can't be claimed as an immediate deduction.
This means they would claim it as depreciation over the asset's effective life.
15 Apr 2026 · 4 min read time
15 Apr 2026 · 8 min read time
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