Claiming tax deductions for renovations in Victoria is possible, but it depends on the nature of the work and whether the property is an investment property or your primary residence. Generally, expenses related to structural improvements, rather than routine maintenance, may be deductible.
As of December 2025, in Melbourne’s Eastern Suburbs, many sellers are undertaking pre-sale renovations to maximise their property’s appeal. If you’ve made capital improvements – such as extending a kitchen, adding a bathroom, or landscaping – and the property is an investment property, these costs can be claimed over the asset’s life. For primary residences, capital gains tax implications are more relevant when calculating any potential benefit from renovations upon sale. Currently in Melbourne, we’re seeing buyers favour properties that present well and offer renovation potential, meaning strategic improvements can significantly impact sale price. Typical renovation costs encountered by sellers preparing their homes in areas like Balwyn and Doncaster range from $2,000 to upwards of $20,000 depending on the scope of work. It’s important to retain all invoices and documentation. Fletchers’ experience shows that well-documented renovations can be a positive talking point during the sales process, demonstrating the property’s value to prospective buyers.
Understanding the tax implications of renovations is complex, and it’s always best to consult with a qualified tax professional for personalised advice.