5 tax tips to max cashback on your property investment
With tax season knocking at the door and the economy sailing into rougher waters, here are strategic ways property inves...
An audit revealed 90 per cent of tax deduction claims on rental properties were inappropriate, prompting the Tax Office to signal a crackdown on property investors.
The audit, which included a look at 300 rental claims, found errors in about nine out of 10 returns.
This prompted a warning from Commissioner of Taxation Chris Jordan, who typically signals large-scale priorities to taxpayers.
“We’re seeing incorrect interest claims for the entire investment loan where it has been refinanced for private purposes, incorrect classification of capital works as repairs and maintenance, and taxpayers not apportioning deductions for holiday homes when they are not genuinely available for rent,” said Mr Jordan.
“And when you consider that rentals include over 2.1 million taxpayers claiming $47.4 billion in deductions, against $44.1 billion in reported income, you can get a sense of the potential revenue at risk,” he said.
The work the ATO will be doing with inappropriate deductions is on top of the compliance blitz it previously spoke to Smart Property Investment about. For a comprehensive wrap of what’s on the agenda this year, click here.
Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.