The answer depends on the context. Here’s how Inland Revenue (IRD) and general tax practice in New Zealand treat painting expenses.
When Painting is a Repair (Deductible Expense)
Painting is generally considered a repair or maintenance cost if it is done to restore the property to its original condition. That means the cost can usually be claimed as a deduction in the same year.
Examples include:
- Repainting faded, chipped, or peeling walls caused by wear and tear.
- Refreshing the same colour and finish without upgrading the property.
- Touching up paintwork to maintain the property’s condition.
In short: if you’re keeping the property in good condition, it’s maintenance - and deductible.
When Painting is an Improvement (Capital Expense)
Painting is treated as a capital improvement when it enhances or changes the property beyond its original state. These costs can’t be deducted immediately; instead, they’re added to the property’s cost base.
Examples include:
- Changing the colour scheme to modernise or add appeal.
- Using a higher-quality finish to upgrade the property.
- The first paint job on a newly built property.
- Painting as part of a larger renovation (e.g., full kitchen remodel, extensions).
In short: if painting adds value or upgrades the property, it’s an improvement.
A Simple Rule of Thumb
Same colour, same condition? → Repair/maintenance (deductible).
New look or part of a renovation? → Improvement (capital expense).
Why It Matters for Landlords
Getting this distinction right ensures you claim the right deductions without running into issues with IRD. Repairs reduce your taxable income immediately, while improvements are treated differently for tax purposes.
Pro Tip: Keep Clear Records
Always keep detailed invoices and notes about the work. If you ever need to justify whether painting was a repair or an improvement, documentation makes all the difference.
Need a simple way to track expenses? With myRent’s Expense Tracker, you can record the costs of your repairs, upload receipts, and have everything ready at tax time - no shoebox of receipts required. Learn more
If you need help with your tax return or have a question about accounting or property tax, book a free consultation with Shortland Chartered Accountants here.
This article is for general information only. You should always seek personalised, professional advice before acting on any of the material.
