EOFY and property is in ATO's sights

EOFY and property is in ATO's sights

Tax accountants are advising clients that the ATO will be targeting property this year.
 
Each year, the ATO puts specific occupations or investment areas under the spotlight.

 
In May last year, the ATO released a series of online videos to educate taxpayers about the implications of renting out a property. Accountants have taken this as a sign that property income will be the subject of stringent audits in FY16.
 
According to the Commonwealth Government, in January this year, 1.8 million Australians had an investment property (or around eight per cent of the population). The majority of investors (around 70 per cent) owned only one property, while around 20 per cent owned two and just one per cent owned six or more. 
 
Landlords lodging false expense claims will be on the auditors’ radar – and as always ignorance is no defence, so check with your tax advisors/accountants about what you can legitimately claim.
 
The ATO advises that the following rent or rent-related payments must be included in addition to your rental income (and if you co-own the property you need to declare your share):
 
  • rental bond money if you become entitled to retain it
  • an insurance payout to compensate you for lost rent
  • a letting or booking fee
  • a reimbursement or recoupment for deductible expenditure
  • the monetary value of any goods or services you received in lieu of rent.
 
Keep good records on income and expenditure and speak with your financial advisors about the best strategies to make the most of your investment. And remember, landlord insurance is usually a bona fide tax deduction, so make sure yours is up-to-date.
 
 
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