Property investor tax claims face close ATO scrutiny

The Australian Tax Office (ATO) has advised property investors that it will be scrutinising their tax claims closely.

Property investor tax claims face close ATO scrutiny
Property investor tax claims face close ATO scrutiny

The Australian Tax Office (ATO) reduces some 70 per cent of property investors’ tax returns that it put through review.

The ATO advisory came as it warned property investors that it will be scrutinising all tax claims closely.

More than 1.8 million Australians owning rental properties claimed $38 billion in deductions in the 2019-20 financial year.

ATO assistant commissioner Tim Loh advised there would be extended surveillance for the 2020-21 year.

The ATO’s data matching and “nearest neighbour” technology examines investors’ tax claims.

“Every return is scanned,” Mr Loh said.

Loh said the most common mistake investors make is failing to declare all their income, including capital gains from selling the investment property or holiday home.

“We are expanding the rental income data we receive directly from third-party sources such as sharing economy platforms, rental bond authorities, and property managers," he said.

He told the Herald Sun “on average the correction was about $4500 for each return”.

“Some people are making genuine mistakes but there’s also people who are deliberately doing the wrong thing,” he said.

Property investors can examine the ATO’s online investor’s toolkit and depreciation and capital allowances tool.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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