ATO target landlords after claims surge

Posted on 12 Jun 2013, 12:27 p.m. in Abercromby's, News

Crackdown on landlords after surge in claims


Almost 1.3 million Australians own at least one investment property.

The Australian Taxation Office is targeting more than 110,000 rental property owners who have been identified through last year’s tax returns as making incorrect claims.

A team within the office known as ”the doctors” is using sophisticated analytical techniques, including data mining, to identify unusual patterns of claims. It is also targeting work-related expenses.

Rental property deductions have surged in recent years as investors prefer bricks and mortar to shares.

For the 2010-11 year, the latest for which data is available, almost $39 billion was claimed by landlords in deductions, an 18 per cent rise on the previous financial year. Investors are taking advantage of negative gearing, where the interest costs on the loan used to buy the property, and other costs, are greater than the rental income. The shortfall reduces the investor’s income on which income tax is paid.

Almost 1.3 million people own at least one investment property. About two-thirds of those with rental income reported a loss on the investment.
The assistant commissioner of client services and assistance at the ATO, Graham Whyte, said expenses can be claimed only for the portion of the year where the property is rented or available for rent. Expenses that cannot be claimed include those incurred while the owner is occupying the property.

The Tax Office is targeting the work-related expenses of 218,000 building and construction workers, and sales and marketing managers, as June 30 nears. It is writing to them because of rising work-expense claims and a high occurrence of incorrect claims in last year’s tax returns.

The main problem with work-related expenses is taxpayers not separating private expenses from legitimate work-related ones. Workers should make claims only where the expenses are incurred to earn an income.

Mr Whyte said about $18 billion of work-related expenses were claimed last financial year.
”The ATO focuses on occupations where the pattern is of large or rising claims, as well as claims that do not fit the pattern of a particular occupation,” he said.

Work expenses claimed incorrectly in last year’s tax returns include sales managers claiming for mobile-phone calls based on the time spent at work, rather than for work-related use.



Post a Comment

Recent Posts


Tag Cloud

Article Archive

Show more...