Taxman watching property investors: Accountants
The Australian Taxation Office (ATO) will be keeping a keen eye on property investors' tax returns this year, to monitor their deductions, according to tax accountants, H&R Block.
H&R Block director of tax communications, Mark Chapman, warned that in the current low interest environment, the ATO will be showing a lot of interest in property ownership to make sure taxpayers do not rort the system.
"Whether it's a commercial property, a city pad rented out long-term or a holiday retreat for family, friends or holiday-makers, the ATO has signalled a big push to check that people aren't over-claiming tax deductions," he said.
"Rental property owners should only claim for the periods the property is rented out or is genuinely available for rent.
"Periods of personal use can't be claimed. This is particularly important for holiday homes, where the ATO regularly finds evidence of home-owners claiming deductions for their holiday pad on the grounds that it is being rented out, when in reality the only people using it are the owners, their family and friends, often rent-free."
Chapman added that the costs to repair damage and defects existing at the time of purchase or the costs of renovation cannot be claimed immediately, warning that the ATO would be checking such claims and pushing back against claims which do not stack up.
"Don't forget, the ATO has access to numerous sources of third party data", Chapman said, "including access to popular holiday rental listing sites, so it is relatively easy for them to establish whether a claim that a property was 'available for rent' is correct."
AUTHOR
Nicholas O'Donoghue
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