With interest rates at historic lows, the Australian Taxation Office is targeting the 1.8 million Australians who own an investment property, on the hunt for tax misdemeanours.
A statement issued by tax specialist accounting firm H&R Block has warned that the ATO is now responding to particular challenges thrown up by the current interest rate environment.
“Whether it’s a commercial property, a city pad rented out long term or a holiday retreat for family, friends and holiday-makers, the ATO has signalled a big push to check that people aren’t over-claiming tax deductions,” said H&R Block director of tax communications, Mark Chapman.
The ATO will, however, be issuing investors with a reminder of the appropriate claim deductions available to them, Mr Chapman said, adding that the tax office has access to a range of third-party data.
“Periods of personal use can’t be claimed. This is particularly important for holiday homes, where the ATO regularly finds evidence of home-owners claiming deductions for their holiday pad on the grounds that it is being rented out, when in reality the only people using it are the owners, their family and friends, often rent-free,” he said.