The Australian Tax Office (ATO) found that 90% of rent deductions were inaccurate, indicating a crackdown on real estate claims for investment purposes.
The government agency announced earlier this year that it would double the number of audits examining rental deductions.
This decision comes as nearly 2.2 million investment property owners have come under financial pressure due to falling real estate prices, oversupply and the rising vacancy rates in all capitals, according to Domain data.
ATO Assistant Commissioner Karen Foat said the top priority for enforcement is real estate investment.
"Cash-strapped investors could borrow more than necessary to supplement their investment or lifestyle with" cheap money "they could claim as a loss and deducted from their other income" said Todd Want, director of tax services for William Buck, the Australian Financial Review. "If you use a loan to buy an investment property, then you take out the loan and pay for a vacation or a car – the purpose of the loan is now partly an investment and partly private, which means that only part Interest on the loan will probably be tax deductible. "
ATO indicated that it would focus on investors who make single deductions for repairs or additions to an investment property that must be claimed over several years.
"The key point here is: are the materials the same or similar and does the repair perform the same function? If you replace it with something higher, you probably will not be able to claim the deduction, it has to be amortized over several years, "Want told the Australian Financial Review. "It might not be deductible the year of its replacement, but should instead be amortized and claimed over time."
The ATO said that it would also drive out Australians who do not declare their income from short-term rentals or renting a part of a house or home. 39, a dwelling. In addition, the government agency will reevaluate vacation homes that are not actually available for rent. Rental property owners should only claim for the periods during which the property is rented. Owners must not claim periods of personal use.
Top suburbs:
Marrickville
,
Cardiff South
,
South Brisbane
,
collingwood
,
Glendenning
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