Key tax tips for ac­com­mo­da­tion shar­ing

Wangaratta Chronicle - North East Regional Extra - - News -

THE ATO is re­mind­ing tax­pay­ers who rent out all or part of their home through ac­com­mo­da­tion shar­ing ser­vices to en­sure they un­der­stand their tax obli­ga­tions.

De­clare in­come

The ATO’s Deputy Com­mis­sioner for Small Busi­ness, Deb­o­rah Jenk­ins, said the most im­por­tant thing to re­mem­ber is that all in­come earned from rent­ing out all or part of a prop­erty needs to be de­clared.

“It doesn’t mat­ter if it’s only for one week of the year, or a few weeks here and there, every dol­lar needs to be de­clared,” Ms Jenk­ins said.

“We know that most peo­ple try to do the right thing but we are con­cerned that some peo­ple don’t un­der­stand their obli­ga­tions.

“Un­for­tu­nately there are a few who know what their obli­ga­tions are but seek to avoid them.

“As the com­mu­nity would ex­pect, we have them in our sights.”

The ATO col­lects in­for­ma­tion from a range of sources, in­clud­ing banks, other govern­ment agen­cies and sup­pli­ers and other third par­ties.

They also get in­for­ma­tion about pur­chases of ma­jor items, such as cars and real prop­erty, and have the abil­ity to com­pare this in­for­ma­tion against in­come and ex­pen­di­ture that tax­pay­ers re­port to them.

The ATO are cur­rently work­ing with third par­ties in the ac­com­mo­da­tion shar­ing sec­tor to pro­vide greater vis­i­bil­ity around these is­sues and to as­sist them in com­pli­ance ac­tiv­i­ties.

Be aware of the Cap­i­tal Gains Tax im­pli­ca­tions

“Just like run­ning a busi­ness from home, once in­come is earned from a pri­mary place of res­i­dence there are Cap­i­tal Gains Tax ( CGT) im­pli­ca­tions.

“It is pos­si­ble that if a prop­erty sig­nif­i­cantly in­creases in value, the amount of CGT owed may even be higher than the amount of in­come re­ceived,” Ms Jenk­ins said.

The ATO en­cour­ages any­one con­sid­er­ing rent­ing out part or all of their pri­mary res­i­dence to seek in­de­pen­dent ad­vice about the tax im­pli­ca­tions. Good record keep­ing will also as­sist in cal­cu­lat­ing the cap­i­tal gain when the prop­erty is sold.

Only claim de­duc­tions you are en­ti­tled to

De­duc­tions can be claimed against in­come earned through ac­com­mo­da­tion shar­ing, how­ever it is es­sen­tial that you keep good records and ap­por­tion ex­penses ap­pro­pri­ately.

You can only claim de­duc­tions that re­late to the por­tion of the house which is rented out, and only for the length of time it is rented.

In­cor­rect rental prop­erty claims will not go un­no­ticed. We are us­ing in­creas­ingly so­phis­ti­cated data an­a­lyt­ics and risk mod­el­ling to iden­tify in­cor­rect or sus­pi­cious claims.

If you think you have made a mis­take

The ATO will al­ways seek to as­sist tax­pay­ers who may have made a mis­take or un­wit­tingly omit­ted in­come. Any tax­payer who thinks they might have made a mis­take or needs as­sis­tance in un­der­stand­ing their obli­ga­tions should con­tact the ATO or their agent.

In­for­ma­tion on tax im­pli­ca­tions of rental prop­er­ties is avail­able on­eral/prop­erty/your-home/rent­ing-out­part-or-all-of-your-home/.

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