The ATO plans to triple number of audits over rental claims.
More than 2.2 million Australians claimed $47 billion in rental deductions in 2017-18.
The ATO audited more than 1,500 taxpayers last year over rental claims and handed out penalties totalling $1.3 million.
The ATO is intending to triple the number of audits it conducts this year to 4,500.
The Australian Taxation Office is turning its focus to rental property tax deductions, and will carry out more audits.
Ms Foat said some examples of problematic claims include people initially claiming their mortgage interest bill on their rental property but then refinancing and buying a boat or doing kitchen renovation in the home they are living in, but still claiming the interest on the rental property.
“The other thing we see is people who are claiming capital works or capital assets in a single year when either of those things need to be written off over a number of years,” she said.
“For example, somebody who has done up their bathroom in their rental property, that’s structural works and needs to be written off at 2.5 per cent over 40 years.
“Or when it comes to assets — say you’ve got something like an air-conditioning system and it breaks down and you replace it — the cost needs to be claimed over the effective life of the asset.”
She said many people earning income through sharing-economy services, such as Airbnb, were still not declaring the income.
“Some people think it’s a hobby. We say, ‘there’s no such thing as a rental hobby’,” she said.
ABC News Report – Assistant Commissioner Karen Foat
28 June 2019
