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Property management glossary
Property investing

Capital expenditure (CapEx)

Also called: CapEx, capital improvement

Plain-English definition

Money spent to acquire or substantially improve a long-lived property asset.

What capital expenditure (capex) means in practice

A capital expenditure is generally different from a routine repair because it adds value, extends useful life, or adapts the property to a new use. Its accounting and tax treatment can differ from an operating expense, so owners should keep receipts and consult a tax professional.

Example

Replacing an entire roof is commonly tracked as CapEx, while patching one small leak may be recorded as a repair expense.

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This glossary is educational and not legal, tax, lending, or accounting advice. Rules and terminology can vary by jurisdiction and professional context.