Generally speaking, landscaping is considered to be an improvement to your property and therefore not tax deductible. It is instead a cost that will be added to the cost base of your property and will reduce any capital gain on the sale of the property in the future.
The Income Tax Act states that construction expenditure specifically does not include expenditure on landscaping (or other costs like demolishing existing structures, clearing, levelling, and draining).
It states that ‘the act’ of landscaping etc is not tax-deductible, however, if physical items are purchased as part of your landscaping costs, then these items are deductible and may be depreciated as capital works assets. Examples of this might include, brick retaining walls, concrete paths, a water tank, artificial grass, or a fixed raised garden box.
These items are considered to be capital works assets as they are ‘improving’ the property to make it better or more valuable. Improvement includes work that provides something new, furthers the expected life of the property, and goes beyond just restoring the efficient functioning of the property.
The rate of deduction for capital works is generally 2.5% or 4% per year, spread over a period of 40 or 25 years respectively. The rate used is dependent on the date construction began, the type of capital works, and how they’re used.
