New data has been now rolling into the ATO from property managers, landlord insurance providers, financial institutions providing loans for residential investment properties and sharing economy providers, as well as income protection policy information.
ATO Assistant Commissioner Tim Loh said: “This isn’t a game of Guess Who, as our sophisticated data-matching programs provide us with all the clues we need to track down taxpayers with incorrect information in their tax return.
“We will use this information to identify and educate taxpayers who have made incorrect claims in their return, with a longer-term plan to pre-fill as much information as possible in future years.”
The ATO’s review of income tax returns show nine in 10 rental property owners are getting their return wrong.
Mr Loh confirmed two new data-matching protocols start this year for rental investors, including investment loan data and landlord insurance policy information.
“Around 80 per cent of taxpayers with rental income claimed a deduction for interest on their loan, and this is where we’re seeing mistakes,” he said.
“For example, you can’t refinance an investment property to buy personal items, like a holiday to Europe or a Tesla, then continue to claim the interest expenses as a tax deduction.”
The ATO was also reminding taxpayers that insurance premiums paid for rental properties can be claimed as a tax deduction. Similarly, any insurance payouts received in relation to an investment property must be reported as income.
“This new data provides us with crucial intelligence to paint a picture of what’s true and accurate in tax returns,” Mr Loh said.
With 87 per cnet of taxpayers who own rental properties using a registered tax agent to lodge their return, Mr Loh said it was important they provide their agent with the right information to prepare their return correctly.
“Taxpayers are responsible for what they include in their tax return, even when using an agent,” he said.
“We are here to help people get their tax return right the first time, but our message is clear – we’re not playing ‘Guess Who’ with tax returns this year,’ Mr Loh said.
With record numbers of taxpayers now working multiple jobs or supplementing their income with side hustles or sharing economy activities, they will also have more accountability.
