This article is from the Australian Property Journal archive
THE Australian Taxation Office (ATO) is on the hunt for $1.3 billion of missing revenue from residential investment properties and will be analysing the data of up to 1.7 million landlords in a bid to claw it back.
A data-matching program will compel 17 Australian financial institutions, including the big four banks Commonwealth, NAB, ANZ and Westpac to share information. The ATO will have access to loan accounts and property details such as the address, transaction histories, and start and end dates of loans.
The ATO says nine in 10 landlords are getting their tax returns wrong, a spokesperson told The Sydney Morning Herald.
The program includes the 2022 financial year and will run to the 2026 financial year, and is in addition to an existing program of matching data of 1.6 million landlords from rental management software running from FY19 to FY23.
According to the ATO, common errors on rental tax deductions include incorrect apportionment of the loan interest costs, claiming costs as a repair rather than a capital works deduction, and not apportioning expenses for private use of the property.
There was an estimated total revenue shortfall from income-based tax for individuals of about $9 billion in FY20.
About 1.3 million people claimed negative gearing, with rental losses totalling $10.2 billion that allowed for about $3.6 billion in tax reductions.
