The ATO is continuing to ramp up its data matching program. On 28 March 2018, they announced that rental property owners who use their own houses for personal holidays are in their sights. Then on 13 April, they announced that they will be acquiring information for the 2017 to 2019 financial years on vehicles transferred or newly registered where the purchase price or market value is greater than $10,000.
The ATO is increasing its focus on taxpayers who claim deductions for holiday homes that are not actually available for rent or that are made available to friends and family.
The key areas of focus are:
- Deductions can only be claimed if the property is genuinely available for rent.
- Use of properties by family and friends at “mates rates” will only be eligible for deductions up to the amount of income received.
The ATO is reminding taxpayers that a property must be genuinely available for rent which means:
- The property must be advertised to a wide audience;
- The property must be in good condition;
- Renters should be charged market rates; and
- In certain circumstances, not accepting tenants can be an indication the owner does not intend to derive income from the property.
To identify and address non-compliance with taxation obligations, and to gather further intelligence, the ATO will obtain records of approximately 1.5 million individuals each financial year from 2017 to 2019.
The data will be obtained from all 8 State and Territory motor vehicle registration authorities, and will include details of the purchaser, seller, licenced dealer, fleet manager, leasing company and so on.
The information gathered will include:
- Individual or business names
- Residential, business and postal addresses
- An individual’s date of birth
- Contact phone numbers
- ABN or ACN if applicable
Transactions will be examined and include dates, type (transfer or new registration) and all details pertaining to the vehicle (make, model, VIN, year of manufacture, etc).
Of particular note, the ATO will be able to assess a purchaser’s risk of not meeting their taxation obligations. For example, the purchase of a vehicle at a price or value that is not commensurate with the income reported on a tax return will attract ATO scrutiny.