A Staggering 90 Per Cent of Landlord Tax Returns Are Incorrect: Tax Office

Must Read

According to tax office statistics, Australia’s “tax gap” amounts to $33 billion annually or 7 per cent of what should be collected.

Most of it, amounting to $12 billion, results from small businesses’ inaccurate tax filings, including the $1 billion related to residential rental property owners.

This gap represents the “difference between the data gathered from owners of residential rental properties and what should be collected,” according to the Australian Tax Office (ATO).

Most frequently, parents rent out their second or subsequent properties.

“A remarkable nine out of 10 sampled tax returns indicating net rental income required adjustment,” Second Commissioner of the Australian Taxation Office, Jeremy Hirschhorn, said.

According to separate statistics from the tax office’s random enquiry program, few of these modifications are in the taxpayers’ favour.

Travel expenses to and from rental property are not deductible under the revised Section 26-31 of the Income Tax Assessment Act, regardless of whether the trip is made to inspect the property or schedule repairs.

The previous regulation stipulated that when travel served two purposes, such as having a vacation and examining the property, apportionment was necessary to establish the proper amount to be deducted.

Furthermore, owners of rental properties that employ used assets are not eligible for depreciation deductions under the new Section 40-27.

When owners move appliances like stoves, dishwashers, or air conditioners from their homes to rental properties or purchase properties with pre-owned assets, they may claim well more than their actual value, sometimes repeatedly, as the properties are transferred from one owner to another.

The new Section 26-102 prohibits deductions (often interest) related to keeping vacant land or land on which the building is anticipated until the residence is finished, suitable, and ready for rent.

By understanding and accurately meeting taxation obligations, landlords can help ensure that Australia’s taxation system remains fair and equitable for all taxpayers. 

- Advertisement -spot_img
Latest News
- Advertisement -spot_img

More Articles Like This

- Advertisement -spot_img