When you own a rental property in Australia, regular upkeep isn’t just about aesthetics—it’s about protecting your asset and meeting your obligations as a landlord. One area that often requires attention is the roof. Whether it’s fixing minor leaks, replacing rusted gutters, or undertaking a complete re-roof, roofing work is a necessary part of maintaining a safe, weatherproof, and liveable property.
If you're managing a rental property in New South Wales, roof repairs in Central Coast are a common and often urgent part of ongoing property maintenance. With a mix of older homes and coastal weather conditions, landlords in the region frequently face roofing issues that require prompt attention.
The good news is that many roofing-related expenses can be claimed as tax deductions, helping to reduce your overall tax burden. However, understanding exactly what can and can’t be claimed isn’t always straightforward. The Australian Taxation Office (ATO) sets out clear rules distinguishing between repairs, maintenance, and improvements—and each is treated differently when it comes to tax.
This article explains how roofing expenses fit into the ATO’s guidelines for rental properties. We’ll break down the difference between deductible repairs and depreciable improvements, outline the record-keeping requirements, and explore how to manage roofing work in a way that maximises your claims while staying compliant. Whether you’re planning a minor fix or a major upgrade, this guide will help you make informed decisions and avoid common pitfalls.
Roofing issues can range from minor leaks to major structural damage, and the costs involved can be substantial. As a landlord, knowing which of these expenses are tax-deductible can make a real difference at the end of the financial year. While some roofing costs can be claimed outright, others must be depreciated over time. Understanding the difference is key to ensuring you’re meeting ATO requirements and maximising your deductions.
The Australian Taxation Office (ATO) classifies roofing expenses according to their purpose and nature. Broadly, roofing work falls into three categories: repairs, maintenance, and capital improvements. Each is treated differently when it comes to tax.
The ATO allows landlords to claim deductions for costs directly related to generating rental income. Roofing expenses are no exception, but only if they meet certain criteria. Here’s how the main categories break down:
Roof Repairs
Repair work is generally deductible in the year the cost is incurred. This includes any activity that restores the roof to its original condition without changing its character or function. For example:
These are considered necessary to keep the property in a rentable state and are therefore tax-deductible immediately.
Roof Improvements
If the work goes beyond simple repairs—such as upgrading the materials or significantly improving the structure—it’s considered a capital improvement. Common examples include:
These are classed as capital works. They are not deductible in the same financial year but can be claimed gradually through depreciation, typically over 40 years at a rate of 2.5% per annum.
It’s important to assess the nature of the work carefully. If you're unsure whether the roofing job qualifies as a repair or improvement, consult with a tax agent or accountant who can help categorise the expense correctly.
Preventative maintenance is generally deductible. This includes tasks carried out on a regular basis to keep the roof in good working order and prevent damage from occurring in the first place. Examples of deductible maintenance work include:
These tasks help preserve the roof’s condition and are part of your responsibility as a landlord to maintain the property. Since they don’t add value or improve the structure, they can usually be claimed as deductions in the same year.
If you’ve used a loan to fund roofing work for a rental property, the interest on that loan may be deductible—provided the borrowed money was used exclusively for the rental property. This applies to both repair work and capital improvements. However, if the loan is mixed-use (e.g., partly for private purposes), you’ll need to apportion the interest and only claim the relevant portion.
Keeping detailed financial records of how the loan was used is essential for substantiating your claim.
Not all roofing expenses can be claimed right away, even if the work is essential. The ATO has specific rules around what counts as a deductible repair versus a capital expense or a private cost. Understanding these distinctions can help you avoid claiming the wrong expenses and ensure your tax return stays compliant.
Below are some common examples of roofing-related expenses that cannot be immediately deducted:
If the roof had pre-existing issues at the time you bought the property—such as leaks, broken tiles, rust damage, or missing flashing—and you repaired them shortly after settlement, those repairs are not considered deductible in the same financial year.
Instead, they are treated as part of the capital cost of acquiring the property. This is because the repairs were necessary to bring the property up to a rentable standard, rather than maintaining it during the rental period. These costs are added to your property’s cost base and may reduce capital gains tax (CGT) when you eventually sell.
Key point:
Even if the work itself is similar to a typical repair, timing and purpose matter. If it was done to address defects present before rental income was earned, it’s not an immediate deduction.
You cannot claim deductions for roofing work on parts of a property that are used for private purposes or that are not being rented out. This includes:
In cases where a property is partly rented and partly used privately, such as a duplex where the owner lives in one half, any roofing expenses must be apportioned based on the rental portion of the property.
Since 1 July 2017, travel costs incurred for residential rental properties are no longer deductible. This includes:
This change was introduced by the ATO to reduce abuse of travel deductions. The only exceptions are for commercial properties or where the taxpayer is in the business of property investing (not just a passive landlord).
Tip:
You can still claim costs for phone calls, postage, or admin fees related to organising roofing work—but travel is off the table.
Not all roofing expenses can be deducted immediately. When roofing work goes beyond maintenance and repair—such as a full roof replacement or a structural upgrade—it is classified as a capital improvement under ATO rules. These improvements form part of the building’s structure and are treated as capital works.
Instead of claiming the full cost in the year the work was completed, landlords must depreciate capital works over time. The standard depreciation rate for structural improvements, including roofing, is 2.5% per year for 40 years.
Although these improvements don’t give you an immediate tax benefit, they still offer long-term value. By including them in your depreciation schedule, you can recover a portion of the cost each year over the life of the asset.
Important: To claim depreciation on capital roofing work, the property must be rented or genuinely available for rent during the year.
Getting the most out of your roofing deductions means more than just spending wisely—it also comes down to documentation, timing, and understanding how the ATO classifies each type of work. Here are some best practices to follow:
Always retain invoices, quotes, payment confirmations, and written correspondence with roofing contractors. This documentation is essential for distinguishing between repairs and capital works, and it supports your claims in case of an audit.
Roofing work often sits in a grey area between repairs and improvements. A qualified accountant or tax agent can help you correctly categorise expenses, ensure deductions are claimed in the appropriate year, and assist with preparing depreciation schedules if needed.
If you’re organising both repairs and upgrades, the timing can influence your deductions. For example, completing repair work before the financial year ends allows you to claim the full amount in that year. Capital improvements, on the other hand, can be timed to spread the cost strategically across future years through depreciation.
Even with a solid understanding of the rules, it's easy to make errors when claiming deductions for roofing work. These mistakes can result in missed opportunities for tax savings or, worse, trigger an audit or adjustment by the ATO. Below are some of the most frequent pitfalls landlords encounter, along with guidance on how to steer clear of them.
One of the most common errors is incorrectly categorising roofing work as a repair when it's actually an improvement—or vice versa. The distinction is important because repairs are fully deductible in the year they’re carried out, while improvements must be depreciated over time.
For example:
This classification doesn’t depend solely on the cost or materials used—it’s about the intent and effect of the work. Ask yourself: does this restore what was already there, or does it add something new or better? When in doubt, it's wise to consult an accountant or tax advisor.
Another common oversight is failing to include capital roofing work in a property’s depreciation schedule. Large-scale upgrades, such as re-roofing or switching to more durable roofing materials like Colorbond® or steel, may not be immediately deductible, but they can still deliver long-term tax benefits through depreciation.
Neglecting to claim this depreciation can mean missing out on thousands of dollars in deductions over the life of the improvement. Engaging a qualified quantity surveyor to prepare a depreciation schedule is often well worth the cost, as they can identify all eligible items and ensure your claims are accurate.
ATO compliance heavily relies on documentation. If you don’t keep thorough records of your roofing expenses, you risk having your claim denied—especially if the expense is questioned years later.
You should maintain:
Records should be kept for at least five years after lodging your tax return. Using digital accounting software or a cloud-based document storage system can make it easier to organise and retrieve information when needed.
If you used borrowed funds to pay for roofing work, you might be able to claim the interest portion of that loan—but only if the funds were exclusively used for the rental property.
For example, if you took out a $20,000 loan and only $10,000 went toward roofing work on a rental property while the rest went to other unrelated personal expenses, you may only claim the interest associated with the $10,000. Overclaiming interest by not properly apportioning the loan could lead to penalties, back taxes, and interest charges if audited.
To avoid this, maintain a clear paper trail showing how loan funds were used, and separate personal and investment-related borrowings wherever possible.
When a property is only partially rented—such as a duplex where the landlord lives in one unit and rents out the other—roofing expenses must be apportioned based on the portion of the property used to generate income.
Say 50% of the property is rented out and you replace the roof over the entire structure: only half the cost can be claimed as a rental property deduction. Applying the full cost to your tax return is considered overclaiming and may raise a red flag with the ATO.
To ensure accurate apportionment:
Roofing work is one of the most significant and recurring maintenance responsibilities for landlords in Australia. Whether you're dealing with minor leak repairs, routine gutter cleaning, or full roof replacements, it’s crucial to understand how each type of expense is treated for tax purposes. The difference between a repair and an improvement isn't always obvious, but it has a direct impact on whether you can claim the cost immediately or need to depreciate it over time.
By familiarising yourself with the ATO’s classifications, keeping meticulous records, and seeking professional advice when needed, you can avoid common tax pitfalls and make the most of the deductions available to you. This isn’t just about saving on tax—it’s about managing your property investment wisely and ensuring its long-term value.
Whether you're planning roof repairs in Central Coast or anywhere else in Australia, having a clear approach to how roofing expenses are handled at tax time can lead to better financial outcomes and greater peace of mind.
