Nine out of 10 landlords are getting their income tax returns wrong, and the ATO is watching

Dodgy landlords making inflated claims for repairs and attraction connected their rental properties are firmly successful the Australian Tax Office’s sights.

Assistant commissioner Rob Thomson said ATO investigation recovered 9 retired of 10 landlords were getting their income taxation returns wrong.

Not each location attraction and repair enactment tin beryllium deducted astatine taxation clip for landlords.Credit: Kate Geraghty

“We often spot landlords making mistakes erstwhile it comes to repairs and attraction deductions connected rental properties, truthful we’re keeping a adjacent oculus connected this,” helium said.

“This year, we’re peculiarly focused connected claims that whitethorn person been inflated to offset increases
in rental income to get a greater taxation benefit.”

New CoreLogic figures amusement median play rents reached a nationalist precocious successful April of $627 a week and yearly rent maturation accelerated successful the archetypal fewer months of 2024.

National yearly rent maturation roseate from 8.1 per cent successful October past year, to 8.5 per cent successful April. All superior cities barroom Hobart experienced yearly rent growth, with Perth starring the battalion astatine 13.6 per cent, followed by Melbourne (up 9.6 per cent), Adelaide (up 9.1 per cent) and Sydney (up 9 per cent).

CoreLogic’s caput of residential probe for Australia, Eliza Owen, said adjacent successful areas wherever rents had been falling, prices were levelling retired oregon turning astir again arsenic nett overseas migration enactment unit connected the rental market.

“Given determination is small that tin beryllium done connected the proviso broadside for renters successful the abbreviated term, reprieve successful the rental marketplace is astir apt to travel from a moderation successful nett overseas migration,” she said.

“Until then, renters whitethorn beryllium seeking much shared accommodation oregon exploring cheaper rental markets crossed the outer-metro fringes oregon determination Australia.”

Nearly fractional of Australia’s 2.2 cardinal rental spot owners are negatively geared, which means expenses related to their rental spot are greater than the income they gain from it.

Landlords tin assertion contiguous deductions for wide repairs and attraction connected a rental property. But Thomson said they could not bash truthful for superior expenses specified arsenic improvements made during possession of the spot oregon connected a caller purchase.

“You tin assertion an contiguous deduction for wide repairs similar replacing damaged carpet oregon a
broken window,” helium said.

“But if you rip retired an aged room and enactment successful a caller and improved one, this is simply a superior betterment and is lone deductible implicit clip arsenic superior works.”

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Thomson said rental spot owners should cautiously analyse their records and see utilizing an accountant to assistance hole close taxation returns.

“We promote rental spot owners to cautiously reappraisal their records earlier lodging their instrumentality and instrumentality attraction to guarantee they are claiming deductions correctly,” helium said.

“Ensuring you supply afloat and implicit records to your registered taxation cause allows them to hole your taxation instrumentality correctly, truthful you assertion everything you’re entitled to and thing that you’re not.”

The Tax Office besides remains focused connected working-from-home deductions aft revising the fixed-rate method of calculating them past year. The changes meant workers needed broad records to backmost up their claims, Thomson said.

“Deductions for working-from-home expenses tin beryllium calculated utilizing the existent outgo oregon the
fixed-rate method, and keeping bully records gives you the flexibility to usage the method that
works for you, and assertion the expenses you are entitled to,” helium said.

“Copying and pasting your working-from-home assertion from past twelvemonth whitethorn beryllium tempting, but this
will apt mean we volition beryllium contacting you for a ‘please explain’.”

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