INCORRECT and false property claims are in the spotlight this tax time as the Australian Taxation Office cracks down on rental property owners.
ATO assistant commissioner Graham Whyte said close attention would be paid to excessive interest expense claims and incorrectly apportioned rental income and expenses between owners.
Holiday homes not genuinely available for rent and incorrect claims for newly purchased rental properties would also be looked at.
In an ATO case study, the new owner of a rental property had a loss of almost $60,000 disallowed and penalties applied after failing to prove he had actively sought tenants or taken sufficient steps to advertise the property for rent.
“If you are claiming deductions for your rental property, be sure to include all your rental income and make sure that your property was genuinely available for rent when the expense was incurred,” Mr Whyte said.
“You must also make sure to apportion any deductions to take any private use into account, and you must have records for the claims you make.”
With the sharing economy also in the ATO’s crosshairs, income earned via accommodation sharing, such as online marketplace Airbnb, would be checked.
Mr Whyte said the office’s ability to identify incorrect rental property claims was becoming more sophisticated due to technological advancements and the extensive use of data.
More than 600 million pieces of data from third-party sources, including income information from banks, enabled a picture of an individual’s assessable income to be formed, so it was important to get claims right the first time.
Mr Whyte said rental property owners could visit the ATO website to better understand their obligations.
More information is available at ato.gov.au/rental.