What does the ATO know about you?
We’re all aware of the information provided to the ATO from various institutions eg Health Insurance, banks, dividends etc. However, their powers are now being extended to rental properties.
So while the ATO doesn’t advise your Accountant (that’s us) of the information they have in regards to your investment property….they do know!
The ATO’s property management data matching protocol has been extended. This means software providers are required to give details of rent and expenses for residential properties managed by a property manager.
This information along with data from banks, landlord insurers, rental bond authorities and the sharing economy gives the ATO nearly full visibility of your rental property.
To date, the ATO’s data matching has found the following common errors with taxpayers who own rental properties:
- Instead of reporting gross rental income and claiming expenses, the ‘net’ rent is reported and the same expenses are claimed a second time.
- Properties are being omitted from returns
- Where they are owned by multiple taxpayers, only one owner reports the property – when both are required to report
- Not reporting the rental income received when purchasing an already tenanted property that the new owner intends to move in to
- Capital works or depreciating assets being claimed as repairs and maintenance
- Claiming loan repayments as a tax deduction instead just the interest portion of the repayment
As you can see from the above….the ATO’s information gathering is casting a wider net.
Author
Kim Jay