Publication date: 14 Mar 19 |
Source: THE TAX INSTITUTE
HOBART, 14 March 2019: In his speech at The Tax Institute’s 34th National Convention in Hobart today, Commissioner of Taxation, Chris Jordan AO revealed that estimates suggest that nine out of 10 rental property returns lodged are incorrect.
“As part of our broader random enquiry program, our auditors have now completed over 300 audits on rental property claims and found errors in almost nine out of 10 returns reviewed”, say the Commissioner.
Professor Bob Deutsch, Senior Tax Counsel at The Tax Institute said, “I find this figure surprisingly high and would like to understand in more detail the precise nature of the problems that have been detected.”
The Commissioner said the ATO is seeing incorrect interest claims for the entire investment loan where it has been refinanced for private purposes, incorrect classification of capital works as repairs and maintenance, and taxpayers not apportioning deductions for holiday homes when they are not genuinely available for rent.
The Commissioner added, “…when you consider that rentals include over 2.1 million taxpayers claiming $47.4 billion in deductions, against $44.1 billion in reported income, you can get a sense of the potential revenue at risk.”
“We also know that 85% of taxpayers with rental properties are represented by an agent, so you can see there is work we can do together in this space. To assist we have developed a 10 range of products for tax agents including a comprehensive rental guide, which can be accessed on our website”, said the Commissioner.
For more information, please contact: Stephanie Conway, Media Relations: 02 8223 0011.
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