Rental deduction audits to double


The Australian Tax Office (ATO) has announced it will double the number of audits on rental deductions, warning rental property owners to ensure their claims are correct.

“A random sample of returns with rental deductions found that nine out of 10 contained an error. We are concerned about the extent of non-compliance in this area and will be looking very closely at claims this year,” says ATO Assistant Commissioner Gavin Siebert.

“We use a range of third party information including data from financial institutions, property transactions and rental bonds from all states and territories, and online accommodation booking platforms, in combination with sophisticated analytics to scrutinise every tax return.

“Where we identify claims of concern, ATO staff will investigate and prompt taxpayers to amend unjustifiable claims. If necessary, we will commence audits,” he says.

The ATO expects to conduct 4,500 audits for this financial year, with a specific focus on over over-claimed interest, capital works claimed as repairs, incorrect apportionment of expenses for holiday homes let out to others, and omitted income from accommodation sharing.

Deliberate attempts to over-claim can attract penalties of 75% of the claim. In 2017–18, the ATO audited over 1,500 taxpayers with rental claims, and applied penalties totalling $1.3 million.

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