Are Repairs Tax Deductible for Rental Properties? A Guide for Self-Managed Landlords in Orange County

If you self-manage a rental property in Orange County, you already know repairs are part of the deal—leaky faucets in Costa Mesa, HVAC issues during a Santa Ana wind heat wave, or termite surprises in older homes near the coast. The good news: many rental property repairs are tax deductible. The tricky part is knowing what counts as a deductible repair versus an “improvement” you have to depreciate over time.

Below is a practical, landlord-friendly guide to rental property repair deductions, written with self-managed Orange County landlords in mind.

Quick Answer: Yes—Most Repairs Are Tax Deductible (When They Qualify)

In general, repairs to a rental property are deductible as an expense in the year you pay for them, as long as they are considered ordinary and necessary and they keep the property in good operating condition. Examples: fixing a broken garbage disposal, patching a roof leak, or repainting a scuffed wall between tenants.

But if the work adds value, extends the property’s useful life, or adapts it to a new use, it’s usually an improvement, which must be capitalized and depreciated (written off slowly over several years).

Think of it like this:

• Repair = restore or maintain → usually deductible this year

• Improvement = betterment or upgrade → usually depreciated over time

Repairs vs. Improvements: The Rule Landlords Need to Know

The IRS commonly evaluates whether work is a repair or improvement using concepts from the “tangible property” rules. You don’t need to memorize tax code, but you do need to understand the patterns.

Deductible Repair Examples (Common in Orange County Rentals)

These are typically considered repairs because they keep the property in rentable condition:

• Fixing plumbing leaks (toilet rebuild, pipe leak repair, faucet replacement)

• Patching drywall holes and repainting touch-ups

• Repairing a broken window or replacing a cracked pane

• Servicing or repairing HVAC components (thermostat, capacitor, minor parts)

• Replacing a few shingles or repairing flashing on the roof

• Fixing an appliance (repairing a range, replacing a dishwasher latch)

• Replacing a broken garage door spring or sensor

• Treating a pest issue (one-time extermination)

If you’re managing your own rental in places like Irvine, Tustin, or Huntington Beach, these are the bread-and-butter expenses that often qualify as rental property repair deductions.

Improvement Examples (Usually Not a Same-Year Deduction)

These typically must be capitalized and depreciated:

• Full roof replacement

• Complete kitchen remodel (new layout, new cabinets, upgraded counters)

• Replacing all windows with higher-efficiency windows

• Adding a room, ADU, or converting a garage

• Upgrading electrical service panel to support new load

• Replacing an entire HVAC system

• Major plumbing re-pipe of the whole property

A good mental test: if the job feels like a “project” rather than a fix, it’s probably an improvement.

The “Betterment, Restoration, Adaptation” Test (In Plain English)

A cost is more likely an improvement if it:

1. Betterment: materially increases value or upgrades quality
   Example: replacing laminate counters with quartz across the kitchen

2. Restoration: replaces a major component or brings a property back after major damage
   Example: rebuilding a deck after structural failure

3. Adaptation: changes the property for a new use
   Example: converting a den into a bedroom to raise rent tiers

If your Orange County rental repair is simply returning something to its previous working condition, it usually leans “repair.”

What About Turnover Costs Between Tenants?

Self-managed landlords ask this all the time: “If I’m getting the unit ready for the next tenant, are those costs deductible?”

Often, yes—especially when it’s routine make-ready work:

• Patch and paint (same color or similar)

• Replace damaged blinds

• Fix door hardware and locks

• Minor landscaping clean-up

• Professional cleaning and hauling junk

However, if your turnover involves upgrading the unit to a higher rent bracket—like a full bathroom upgrade—then those costs may be improvements.

Pro tip: If you combine repair work and upgrades in one contractor invoice, ask for a line-item breakdown. That makes your bookkeeping (and tax filing) much easier.

Special Note for Self-Managed Landlords: Your Own Labor Isn’t Deductible

If you personally do the repair—say you spend a Saturday replacing a disposal in Lake Forest—you cannot deduct the value of your time. You can generally deduct:

• Materials and supplies you paid for (parts, paint, hardware)

• Equipment rentals

• Mileage or vehicle expenses related to rental operations (tracked properly)

• Contractor labor if you hire it out

Keep receipts and notes. A simple folder system by property and month can save you serious stress later.

The De Minimis Safe Harbor: Small Purchases That May Be Easier to Deduct

Many landlords buy lots of “small stuff”: smoke detectors, faucet cartridges, light fixtures, locks, outlet covers. There are IRS rules that may allow expensing smaller items rather than capitalizing them, depending on your situation and how you treat expenses in your records.

This is one area where it’s worth asking your tax pro how they apply safe harbor elections for your rentals—especially if you’re scaling a portfolio in Orange County and your total maintenance spend is growing.

Repairs That Might Be “Capital” Depending on Scope

Some items fall into a gray zone. For example:

• Replacing one window in a unit: often a repair

• Replacing all windows: often an improvement

• Replacing a section of flooring after damage: often a repair

• Replacing flooring throughout with upgraded materials: often an improvement

• Fixing part of a roof: often a repair

• Replacing the entire roof: almost always an improvement

Scope matters. So does documentation.

Best Recordkeeping Practices for Rental Property Repairs

If you want to maximize your rental property tax deductions (and sleep better), do these:

1. Keep receipts and invoices (PDF scans are fine).

2. Note the “why” in the memo line: “fixed leak under sink,” “replace broken lock.”

3. Separate repairs vs improvements in your bookkeeping categories.

4. Track dates (especially if work spans end-of-year).

5. Keep photos before/after for major repairs or insurance-related damage.

This is especially useful in Orange County, where higher rents often mean higher tenant expectations—and higher maintenance spend.

FAQ: Orange County Landlord Repair Deduction Questions

Are emergency repairs deductible?
Usually, yes—if they qualify as repairs (like stopping a leak or restoring power).

Are HOA special assessments deductible?
Sometimes yes, sometimes no, depending on what they fund (maintenance vs capital projects). This is a “read the notice carefully” situation.

Can I deduct repairs if the unit is vacant?
Often yes, if the property is held out for rent and you’re actively trying to rent it (advertising, showings, etc.).

What about repairs after a tenant moves out?
If it’s normal wear-and-tear fixes, often deductible as repairs. Upgrades are typically improvements.

Bottom Line: Repairs Are Often Deductible—Upgrades Usually Aren’t (Right Away)

For self-managed landlords in Orange County, repair deductions can significantly reduce taxable rental income, but only if you correctly separate repairs from improvements and keep solid documentation.

If you’re unsure about a specific expense—especially anything that feels like a remodel—consider running it by a qualified tax professional. A quick review can prevent costly misclassification and help you claim every deduction you’re entitled to.

Disclaimer: This article is for general educational purposes and isn’t tax advice. Tax treatment varies by situation—consult a CPA or enrolled agent for guidance specific to your rental property.