The Sunday Mail (Queensland)
Tax office takes aim at Yasi’s victims
NORTH Queensland property owners grappling with cyclone damage are now being warned they are in the sights of the tax office.
The Australian Taxation Office has written to investment property owners in the region battered by Cyclone Yasi accusing them of trying to fiddle their tax, on the basis their rental incomes are down.
But far from using their homes for personal holidays or letting them at a discount to family members as the ATO warning letters suggest, the property owners have struggled to find paying tenants in the post-cyclone period.
Deputy Tax Commissioner Steve Vesperman’s August 18 memo went to landlords whose rental income “was lower than expected”, with a warning against using rental properties as “a holiday home”.
He warned property owners “deductions are also limited if the property is rented to family or friends below the market rate”.
Some landlords with cyclone-affected properties in the region struggle to gross five-figures in annual rental income. Latest coastal bungalow rentals are less than $300 per week on properties which sustained 2011 cyclone damage exceeding $100,000.
Cyclone Yasi caused financial ruin in a coastal strip from Port Hinchinbrook north past Bingil Bay, near Innisfail.
This coastal strip was already battling after Cyclone Larry in March 2006 was followed by the global financial crisis in 2008.
The value of some luxury residences in exclusive Mission Beach dropped 40-50 per cent from the million-dollarplus “high water” marks in 2005 as interstate visitors disappeared.
“For Sale” signs dot the foreshore areas.