Westwood Conveyancing

Property Investors - WARNING

Major Blitz coming for Property Investors

Almost all property investors are making errors on their tax deductions, and the Tax Office is set to launch a major crackdown to correct and catch inappropriate claims.

The Tax Office recently conducted an audit of over 300 rental property claims. It found errors in almost nine out of 10 returns reviewed.

“We’re seeing incorrect interest claims for the entire investment loan where it has been refinanced for private purposes, incorrect classification of capital works as repairs and maintenance, and taxpayers not apportioning deductions for holiday homes when they are not genuinely available for rent,” said ATO boss Chris Jordan.

“And when you consider that rentals include over 2.1 million taxpayers claiming $47.4 billion in deductions, against $44.1 billion in reported income, you can get a sense of the potential revenue at risk,” he said.

The ATO is now set to target these inappropriate deductions, on top of the compliance work it is already doing with property investors.

Short-term rentals are on the ATO’s watchlist, as platforms like Airbnb continue to grow in popularity.

By using the new data provided by online rental platforms, including income received per listing as well as listing dates, enquiry and booking rates, prices charged or quoted per night, and other information, the ATO will seek to identify taxpayers not meeting their registration, reporting, lodgement or payment obligations.

The new data complements long-term rentals information that the ATO already receives from state and territory bond boards.

Further, the ATO is monitoring compliance with new rules about travel deductions to and from investment properties.

Under legislation that applied from 1 July 2017, taxpayers are no longer able to claim any deductions for the cost of travel to their investment property, with very few exclusions.

Further, income tax deductions for the decline in value of previously used plant equipment in an investment property are no longer allowed.

SOURCE  :  https://www.nestegg.com.au/property/12949-major-blitz-coming-for-property-investors?utm_source=Nestegg&utm_campaign=16_03_19&utm_medium=email&utm_content=1

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