Focus on holiday home rentals
THE Australian Taxation Office (ATO) is setting its sights on the large number of mistakes, errors and false claims made by rental property owners who use their own property for personal holidays.
“The ATO is focusing on taxpayers who claim deductions for holiday homes that are not actually available for rent or only available to friends and family,” assistant commissioner Kath Anderson said.
“While private use by family and friends of a holiday home is entirely legitimate, it does reduce your ability to earn income from the property.
“This in turn impacts the deductions you can claim.
“You can only claim deductions for your holiday home if your property is genuinely available for rent.
“You cannot claim for times when you were using it for your own personal holidays or letting friends and family stay rent-free.
“It’s not ok to expect everyone else to pay for your holiday.
“Holiday home owners also need to remember that if their property is rented to friends and family at mates rates, they can only claim deductions for expenses up to the amount of the income received.”
Besides holiday rentals, the ATO is also focused on other times when a property is not rented or genuinely available for rent. Ms Anderson said some taxpayers claim their property is available for rent, but when the ATO investigates, it is clear they have little intention of renting it out.
“We see things like unreasonable conditions placed on prospective renters, rental rates set above market rates, or failing to advertise a holiday home in a way that targets people who would be interested in it,” Ms Anderson said.
“Incorrect rental property claims will not go unnoticed.”
Ms Anderson said all rental property owners should doublecheck their claims before lodging their tax return, even if submitting through a tax agent.
“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 at market rates,” she said.
“Be sure to keep accurate records of the income you receive from your rental property, expenses you incur, and evidence of the property being rented or genuinely available for rent at market rates. You should also records of who stayed at the holiday home and when, including the time you and your family stay at the property.”
For more information on holiday homes, visit ato.gov.au/holidayhomes
For more general information on rental properties, visit ato.gov.au/ rental.
GETTING AWAY: Keep an eye on your deductions when claims are related to your holiday home.