The Australian Revenue Service (ATO) is looking to those who use their own property for personal holidays purposes and at the same time false claim deduction to ATO.
"when Australians enjoy Easter holidays, they should realize that ATO will focus on those who declare their holiday home, deduction. Because some of the holiday homes is not actually used for rental, or only for friends and family. " Assistant Commissioner Kath Anderson said
While family and friend use of a holiday home is perfectly legal, it does reduce your ability to earn income from your property. You can't file a tax credit for that period. It is inappropriate to expect other tax payer to pay for your holiday and vacation home.
In addition to holiday rentals, ATO will also focus on rental of homes at other times, Ms Anderson said. Some taxpayers claim that their property can be rented, but when the ATO investigated it, it was clear that homeowners had no intention of renting it out.
Ms. Anderson said that in one case, a man who owned a property on the Monington Peninsula, Victoria, filed a $ seven hundred and sixty thousand tax credit, while in fact 87% of the property a year was owned by him or his family and friends. "that includes not allowing reservations during peak hours." She said.
The man declared 27, 000 Australian dollars in income from the property, which Anderson said was unreasonable given the huge deductions he filed.
Incorrect declarations must be found. Both error and deliberate over-claim will be identified by ATO's new data matching technology.
Mark Chapman, director of tax communications at Hor Block, said the ATO threat was not empty, and technology developments made it easy to track whether people had done something wrong.
"if you say your vacation house is for rental, ATO can Google search, or they can see those commercial rental sites," Chapman said. "if your property isn't there, or if you don't have a reservation for a lot of days, they're about to question your declaration."
Owners of the wrong claim deduction will be subject to scrutiny from ATO.
Ms. Anderson said fines for improperly declared fines vary, with a maximum of 75 percent of the tax shortfall.
Owners of all rental homes should carefully check their application before submitting their tax return, even if they are submitted through a tax agent.
"you need to make sure that the amount you declare is correct. Be sure to keep an accurate record of your income from rental properties, the costs incurred, and the evidence that you are really renting property at market prices. You should also record who used holiday home. at when. Including the time you and your family spend. "
Can you really rent your property?
Real estate advertisement
Being a real estate agent or advertising on a website is not enough to prove that a real estate can really be rented, and there are a few things you need to do
Ensure that property is in good condition
Make sure your house is in a reasonable rental situation, such as good housing condition and location. If your property is dilapidated or remote, it is unrealistic to expect it to attract people.
Rental at market interest rate
Stop a tenant from applying for a rental at a rent higher than the market price, and your property may not really be available for rent. Similarly, if you, your family or your friends use the house for free, it means that the house is not fit to be rented out during this period.. If the property is rented at a discount, the permitted amount of deduction is limited to the rent charged, not the market price.
Accept tenant
If you refuse to lease your property to interested potential tenants without a reasonable reason, it suggests that you may have no real intention of earning income from the property. In this case, your property does not meet the real criteria for renting.