Hom­ing in on hol­i­day homes MONEY MAT­TERS

Wangaratta Chronicle - North East Regional Extra - - News -

IN the lead up to tax time, the ATO is re­mind­ing tax­pay­ers that it’s pay­ing close at­ten­tion to ren­tal prop­er­ties lo­cated in pop­u­lar hol­i­day des­ti­na­tions around Aus­tralia.

As­sis­tant Com­mis­sioner Kath An­der­son said that last year the ATO iden­ti­fied a large num­ber of mis­takes with de­duc­tions for ren­tal prop­er­ties, par­tic­u­larly with re­gards to hol­i­day homes.

“We’ve no­ticed some peo­ple are claim­ing de­duc­tions for hol­i­day homes even where the prop­erty is not gen­uinely be­ing rented out, or gen­uinely avail­able for rent,” Ms An­der­son said.

“There’s no prob­lem with peo­ple us­ing their ren­tal prop­erty for their hol­i­day, but hol­i­day home own­ers need to re­mem­ber they can only claim tax de­duc­tions for ex­penses made dur­ing a pe­riod when the home is rented out or gen­uinely avail­able for rent.”

Prop­erty own­ers also need to un­der­stand that if they rent their prop­erty at a dis­counted rate, or ‘mates’ rates’ they can only claim de­duc­tions equal to the amount of rent charged.

“One tax­payer had to pay the ATO back over $ 45,000 in tax from de­duc­tion claims made for a hol­i­day home they were rent­ing out to friends and fam­ily be­low the market rate.”

Ms An­der­son said the ATO is fo­cused on us­ing data to iden­tify er­rors.

“Prop­erty own­ers should be aware that in­cor­rect ren­tal prop­erty claims will not go un­no­ticed. Tech­nol­ogy en­hance­ments and ex­ten­sive use of data is al­low­ing us to iden­tify in­cor­rect or sus­pi­cious claims. We also have a good idea of the lo­ca­tions likely to be used for hol­i­day homes.”

Ms An­der­son said that all ren­tal prop­erty own­ers, par­tic­u­larly those who rent out hol­i­day homes, should al­ways dou­ble- check their claims be­fore lodg­ing their tax re­turn, and fol­low a cou­ple of sim­ple rules.

“Firstly, make sure that you de­clare all ren­tal in­come and only claim de­duc­tions for pe­ri­ods that the prop­erty is rented or was gen­uinely avail­able for rent.

“Sec­ondly, make sure you have ac­cu­rate records of ex­penses, and strong ev­i­dence of the prop­erty be­ing rented or gen­uinely avail­able for rent at market rates. Ad­ver­tis­ing through a real- es­tate agent or an on­line site is not al­ways enough ev­i­dence to demon­strate that a prop­erty is gen­uinely avail­able for rent.”

For more in­for­ma­tion on Hol­i­day homes, visit ato. gov. au/ hol­i­day­homes.

For more gen­eral in­for­ma­tion on ren­tal prop­er­ties, visit ato. gov. au/ ren­tal.

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