What type of property improvement qualifies as a Capital Expenditure?

Capital Expenditures (CapEx) refer to significant investments made to improve or extend the useful life of a property, which contributes to its value. The replacement of a roof that extends its use fits into this category because it represents a major improvement that not only restores the property's condition but also enhances its longevity, value, and utility.

Such expenditures are typically larger in scale compared to minor repairs or routine maintenance tasks. Unlike minor repairs, which do not significantly impact the overall value or extend the life of the property, a new roof represents a substantial enhancement. Similarly, routine cleaning and annual maintenance do not contribute to increasing the asset's value; rather, they are necessary for upkeep. Hence, the replacement of the roof, as a significant improvement, qualifies as a Capital Expenditure.