Aussies who are renting out property on AirBnB for a little exrtra cash might soon feel the sting from the ATO.
The Australian Taxation Office (ATO) is launching an extensive data-matching program to identify taxpayers receiving income from short term rentals – and those who haven’t told the tax office about it.
In 2016, approximately 2.1 million individuals reported rental income of $42 billion. Assistant Commissioner Kath Anderson said that rental properties are high on the ATO’s priority list given that the rental market is a significant share of the economy and there is evidence that some taxpayers are getting it wrong.
“The availability of short stay rentals has exploded thanks to the online revolution. With the growing number of homes, apartments, units and rooms available via accommodation sharing sites, there is a real risk some people may not understand their tax obligations,” Ms Anderson said.
“The ATO often allows taxpayers who have made genuine errors to amend their returns without penalty. But deliberate attempts to avoid tax on rental income could see the ATO take action.”
There are a few simple rules rental property owners should follow to avoid making mistakes on their tax return.
- Declare all your income.
- Only claim deductions for periods your home is rented out or genuinely avaulabel for ent.
- Remember, costs to repair damage, defects or deterioration existing on purchase, or renovation costs, can’t be claimed as an immediate deduction. These costs are deductible over a number of years.
- Finally, it is important for all property owners to keep accurate records. This helps to ensure they declare the right amount of rental income and they have evidence for claims made.