ATO Warning - Rental of Holiday Homes

Taxpayers with rental properties, will be closely examined by the ATO. Particularly those with rental expense claims.

Location:
National
Division:
Tax Consulting
Industry:
Property & Construction
Publish date:
12 June 2017
Author:
Daryl Jones

Daryl Jones

Tax Consulting
Director
Brisbane
+61 7 3001 8816

P: +61 7 3001 8816

On 7 June, the ATO issued a statement warning taxpayers with rental properties, particularly in popular holiday destinations, that it will be closely examining rental claims in respect of these properties.  The ATO are able to identify incorrect or suspicious claims through their technology and data matching processes. 
 
Particular attention is being paid to holiday homes especially in locations they know to be popular for such properties.  Some key messages from the ATO are:
  1. Deductions being claimed for holiday homes that are not genuinely rented out.
  2. Deductions can only be claimed for holiday homes for periods it is rented out, or genuinely available for rent.
  3. For properties rented out at “mates rates”, deductions can only be claimed for an amount equal to the amount of rental income.
  4. Keep accurate records of expenses and strong evidence that the property is rented, or genuinely available for rent.

Please contact your HLB Mann Judd adviser to discuss this matter further.