Tax of­fice tight­ens rules for landlords

Fraser Coast Chronicle - - COMICS, PUZZLES - AN­THONY KEANE

A TOUGHER tax time looms for Aus­tralia’s 2.1 mil­lion real es­tate in­vestors.

A new gov­ern­ment ban on de­duc­tions for landlords’ travel-re­lated ex­penses, plus the ax­ing of many de­pre­ci­a­tion de­duc­tions for sec­ond-hand prop­er­ties bought since May last year could cost in­vestors thou­sands of dol­lars.

But tax de­duc­tions can be made by those who pay gen­uine ex­penses be­fore June 30 – the Australian Tax­a­tion Of­fice has warned it is watch­ing prop­erty closely.

H & R Block direc­tor of tax com­mu­ni­ca­tions Mark Chapman said the ATO would fo­cus on:

• Ex­ces­sive claims for in­ter­est ex­penses,

• In­cor­rect claims for new prop­erty pur­chases, and

• Hol­i­day homes not gen­uinely avail­able to rent.

“The ATO has ac­cess to nu­mer­ous sources of third party data in­clud­ing pop­u­lar hol­i­day rental list­ing sites … so it is rel­a­tively easy for them to es­tab­lish whether a claim that a prop­erty was avail­able to rent is cor­rect,” Mr Chapman said, adding that many landlords felt ag­grieved by the ban on trav­el­re­lated de­duc­tions.

This rule change was an­nounced last year to com­bat rorts by some in­vestors who claimed big de­duc­tions for vis­it­ing in­vest­ment prop­er­ties in sunny hol­i­day lo­ca­tions, but it af­fects all landlords.

“The vast ma­jor­ity of peo­ple are those driv­ing 5-10km across town be­cause the ten­ant com­plained there was a leak­ing tap or the toi­let was blocked,” Mr Chapman said.

Terri Scheer In­sur­ance ex­ec­u­tive man­ager Carolyn Par­rella said de­spite the changes, landlords of­ten over­looked le­git­i­mate ex­penses, in­clud­ing body cor­po­rate fees, home of­fice ex­penses, land­lord in­sur­ance and prop­erty man­agers.

Ms Par­rella said the ATO had warned that in­cor­rect claims would not go un­no­ticed.

“Even the most fas­tid­i­ous landlords could come un­der scru­tiny from the ATO for over­sights in their book­keep­ing,” she said.

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