ATO: keeping its eyes on rentals, hosts on platforms like Airbnb overclaiming tax

ATO: keeping its eyes on rentals, hosts on platforms like Airbnb overclaiming tax
By Christian Fleetwood


Hosts on platforms like Airbnb will come under the microscope ahead of the Australian Taxation Office’s (ATO) move to put pressure on rentals.

The ATO will perform more than 4,000 audits of “high rask” tax payers who either overclaim or don’t declare income on rental properties.

ATO assistant commissioner Adam Kendrick said it would audit 2017-2018 financial year tax returns relating to rental investments that its data analytics systems had flagged, the ABC reported.

He said the ATO was concerned that occasional income earned through sharing economy platforms, such as Airbnb, was not being declared.

“In the past we have not had a really big presence around rentals, but we are really ramping it up now,” Kendrick said.

Kendrick said taxpayers were considered “high risk” by the ATO because they abused negative gearing laws by either overclaimed deductions or did not declare income at all.

The ABC also reported the ATO had previously undertaken audits of rental deductions claimed for the 2016-2017 tax year, uncovering a handful of agents that had deliberately made claims for properties that do not exist.

Tax Commissioner Chris Jordan told the Tax Institute conference in Hobart last week that with more than two million taxpayers claiming $47.4 billion in rental deductions, against $44.1 billion in reported income, “you can get a sense of the potential revenue at risk”.

The ATO was piloting a program with the Real Estate Institute to hand over property management reports prepared by real estate agents for individuals who rent out their property.

The information contained in these reports – such as council rates, management fees and other costs – could then be used to pre-fill tax returns, he said. The ATO hoped to roll the change out next financial year.

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