This article is from the Australian Property Journal archive
A REGIONAL Victoria property has been forfeited to the Commonwealth after a man was jailed for purchasing it through GST fraud.
The property in the Ballarat suburb of Mount Helen, was restrained by the CACT on 30 January 2024, as suspected proceeds of crime.
The 31-year-old man was jailed for an $800,000 GST fraud, having registered a landscaping business that had no business activity, no income, no assets and no expenses.
The man lodged more than 45 false Business Activity Statements with the ATO between 1 January 2018 and 30 November 2021.
The forfeit of the property came after suspicion that money from the fraud was used to purchase the property, which is worth an estimated $500,000.
It was also alleged that the man transferred the fraudulent GST refunds into an account held by a family member, who then transferred the sale amount to a real estate agent.
“This case shows that even if people try to obscure the source of their wealth it does not put them out of reach of the criminal justice system,” said Allison Buck, commander of the AFP-led CACT.
“Law-abiding Australians work hard to buy their first home: they go to work, they pay their taxes and they save up for a deposit. Criminals flaunt their illicit wealth and try and skip the steps everyone else has to take. This is not on. You will be caught and your access to any illegally purchased assets will be short-lived.”
The man was sentenced on 23 August 2023 to seven years and six months in prison, with a non-parole period of five years imprisonment.
The funds from the sale of the property will be deposited into the Confiscated Assets Account, which is managed by the Australian Financial Security Authority on behalf of the Commonwealth.
Meanwhile, the ATO has announced its three key areas of focus for this taxing period, including inflating claims for rental properties.
According to ATO data, 9 out of 10 rental property landlords are getting their income tax returns wrong.
“We often see landlords making mistakes when it comes to repairs and maintenance deductions on rental properties, so we’re keeping a close eye on this,” said Rob Thomson, assistant commissioner for the ATO.
“This year, we’re particularly focused on claims that may have been inflated to offset increases in rental income to get a greater tax benefit.”
General repairs and maintenance on a rental property can be claimed as an immediate deduction, while expense that are capital in natures are not deductible as repairs or maintains.
Capital expenses includes initial repairs on a newly purchased property and any improvements made during the time a landlord holds a property.
“You can claim an immediate deduction for general repairs like replacing damaged carpet or a broken window. But if you rip out an old kitchen and put in a new and improved one, this is a capital improvement and is only deductible over time as capital works,” added Thomson.
“We encourage rental property owners to carefully review their records before lodging their return and take care to ensure they are claiming deductions correctly.”
