RESIDENTIAL PROPERTY
THE Australia Taxation Office will probe property investors tax return this financial year after finding most rental owners made mistakes despite a staggering 86% using a registered tax agent...
ATO Assistant Commissioner Rob Thomson said the ATO receives data from a range of sources like banks, land title offices, insurance companies, property managers and...
“If you use a tax agent, make sure you let them know all about your rental property, including full records of your expenses. If you have a nagging question or something...
“Rental property investments and taxation can get tricky, so it pays to get the right advice from the very beginning. Don’t rely on things you hear at a Sunday afternoon barbeque,”...
According to the ATO, the most common mistake is not understanding what expenses can be claimed and when. In particular, the difference between what can be claimed for repairs and...
“Rental property owners can claim deductions only to the extent they’re incurred in producing income. This means any costs you incur in generating rental income each year,...
“It’s normal for landlords to have to fix or replace damaged items in a rental property. But there is a bit of a myth that all expenses can be claimed immediately...
“A repair can usually be claimed straight away but capital items, think dishwashers, curtains or heaters, can only be claimed immediately if they cost $300 or less, otherwise they need to...
“We sometimes see rental property owners ‘double dip’ on expenses that the property manager has arranged and included on the property’s income and expenses report for the year...
The most common deductions claimed by rental property owners is interest on mortgages. Based on previous years data, the ATO estimates incorrectly reporting interest expenses account for...
A common issue with interest deductions is where taxpayers are redrawing or refinancing a loan for their rental property and using the money to pay for private expenses like...
Costs relating to borrowing expenses, including loan establishment fees, lender’s mortgage insurance and title search fees, are also commonly being claimed incorrectly...
Body corporate related claims
Meanwhile the ATO said certain body corporate levies are not deductible. For example, a deduction can be claimed for...
Capital expense claims
The ATO is also warning rental property owners about incorrect claims for capital expenses. Repairs such as fixing a dishwasher can generally be claimed...