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ATO Focusing On Rental Property Tax Compliance

by Mary Swire, Tax-News.com, Hong Kong

02 April 2018


The Australian Taxation Office (ATO) has said that it is focusing compliance activity on the holiday home rental sector.

The ATO is paying attention to taxpayers who claim deductions for holiday homes that are either not available for rent or are available only for personal holidays.

Assistant Commissioner Kath Anderson explained: "You can only claim deductions for your holiday home if your property is genuinely available for rent. You cannot claim for times when you were using it for your own personal holidays or letting friends and family stay-rent free."

"Holiday home owners also need to remember that if their property is rented to friends and family at mates' rates, they can only claim deductions for expenses up to the amount of the income received," she added.

The ATO also said that some taxpayers claim that their property is available for rent but have little intention of renting it out.

Anderson said: "We see things like unreasonable conditions placed on prospective renters, rental rates set above market rates, or failing to advertise a holiday home in a way that targets people who would be interested in it."

Anderson stressed that claims that are disproportionate to the income received will be scrutinized by the ATO.

The ATO said owners must keep accurate records of the income they receive from their rental property, the expenses they occur, and evidence of the property being rented or genuinely available for rent at market rates. Owners should also keep records of who stayed at the property and when, including the time they and their family stayed at the property.

TAGS: compliance | tax | tax compliance | real-estate | Australia | travel and tourism | tax authority

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