The Australian Tax Office (ATO) has decided to bring the hammer down on landlords submitting dubious tax returns. With more and more people working from home during these unprecedented times and the rise of home-based businesses and income from short-term rental services like Airbnb or Stayz, it seems the ATO has decided it's time to put an end to this tax fraud.

The ATO's decision comes hot on the heels of an $89.6 million funding boost announced in last week's budget, which is expected to result in an increased Tax Office revenue of $474.9 million over the next five years.

Some of us have had our share of houses, rentals and even the occasional holiday rental or two over the years. Therefore, it's essential to be aware of these changes and ensure that all our tax returns are correctly filed. It’s better to be safe than sorry, dear members.

In the 2019-2020 financial year, there was a tax gap of a staggering $9 billion, with taxpayers paying 94.4% of the total amount theoretically owed to the Commonwealth. Deductions for rental expenses, including those who have incorrectly claimed negative gearing deductions, contributed a sizeable $1.3 billion to this deficit.

The ATO is determined to take strong action against landlords who submit fraudulent tax returns. Source: 9news.com.au

Assistant Tax Commissioner Tim Loh has announced that the ATO is cracking down on this issue. 'We encourage rental property owners and their registered tax agents to take extra care this tax time and review their records before lodging their return,' Loh said, according to The Age.

The Assistant Tax Commissioner also provided a handy tip, saying, 'You can only claim interest on a loan used to purchase a rental property to earn rental income—don't forget, if your loan also includes a private expense, such as for a new car or a trip to Bali, you can only claim an interest deduction for the portion relating to producing your rental income.'

Loh was especially keen to remind Australians that working from home does not excuse them from the proper filing of their tax returns. He pointed out that the ATO's method of calculating work-from-home expenses has changed and advised against using the 'copy and paste' tax return method.

Common Tax Deductions for Landlords​

In today's rapidly advancing technological landscape, it is crucial to stay vigilant about financial matters while considering the potential impact of artificial intelligence on job markets. As we navigate this changing landscape, it is wise to heed Loh's advice and ensure that our financial affairs remain transparent and lawful.

For individuals who derive income from rental properties, it's important to understand the implications for tax purposes. According to MySmartMove, Claiming deductions on your tax return can serve as an effective strategy to minimise the amount of income tax you owe. Landlords, who are considered to be operating a business, have access to a variety of deductions that can significantly reduce their tax burden.



One of the most substantial deductions available to landlords is mortgage interest. This cost is directly associated with generating rental income and can be claimed as a deductible expense. Furthermore, landlords can deduct expenses related to repairs and maintenance, advertising costs, property-related taxes, and utility bills such as water, gas, electricity, and rates.

To ensure that you maximise your tax benefits as a rental property owner, it is advisable to work with an experienced accountant. They can guide you through the process of identifying and claiming the appropriate rental deductions each year. By leveraging these deductions effectively, you can not only reduce your tax liability but also save a significant amount of money.

Considering the potential impact of technology on job markets, it is essential to adopt a proactive approach to financial matters. By adhering to Loh's advice and remaining diligent with your tax obligations as a landlord, you can navigate the changing landscape while safeguarding your financial wellbeing.

SDC Members, it's essential to stay informed about these potential changes to the tax process, particularly for those of us managing rental properties or earning income through short-term rental sites. Staying aware and acting accordingly will certainly help us avoid any unexpected run-ins with the ATO while also allowing us to sleep better at night.

Key Takeaways

• The ATO is cracking down on landlords submitting dodgy tax returns, as well as those working from home and earning income from short-term rental sites like Airbnb or Stayz.
• An $89.6 million funding boost to the ATO is expected to increase Tax Office receipts by $474.9 million over five years.
• The tax gap was $9 billion in the 2019-2020 financial year, with deductions for rental expenses contributing $1.3 billion to the gap.
• Assistant Tax Commissioner Tim Loh encourages rental property owners and their registered tax agents to review their records before lodging their return and warns against the 'copy and paste' tax return method.

So, remember to double-check all your income sources, deductions, and expenses before submitting your tax returns this year, and always consult with a registered tax agent if you're unsure about anything. Let's face it, folks—none of us wants to be at the wrong end of the ATO's crackdown!

 

[kevinwoodtufftyke52@gmail]

I

The Australian Tax Office (ATO) has decided to bring the hammer down on landlords submitting dubious tax returns. With more and more people working from home during these unprecedented times and the rise of home-based businesses and income from short-term rental services like Airbnb or Stayz, it seems the ATO has decided it's time to put an end to this tax fraud.

The ATO's decision comes hot on the heels of an $89.6 million funding boost announced in last week's budget, which is expected to result in an increased Tax Office revenue of $474.9 million over the next five years.

Some of us have had our share of houses, rentals and even the occasional holiday rental or two over the years. Therefore, it's essential to be aware of these changes and ensure that all our tax returns are correctly filed. It’s better to be safe than sorry, dear members.

In the 2019-2020 financial year, there was a tax gap of a staggering $9 billion, with taxpayers paying 94.4% of the total amount theoretically owed to the Commonwealth. Deductions for rental expenses, including those who have incorrectly claimed negative gearing deductions, contributed a sizeable $1.3 billion to this deficit.

View attachment 19829

The ATO is determined to take strong action against landlords who submit fraudulent tax returns. Source: 9news.com.au

Assistant Tax Commissioner Tim Loh has announced that the ATO is cracking down on this issue. 'We encourage rental property owners and their registered tax agents to take extra care this tax time and review their records before lodging their return,' Loh said, according to The Age.

The Assistant Tax Commissioner also provided a handy tip, saying, 'You can only claim interest on a loan used to purchase a rental property to earn rental income—don't forget, if your loan also includes a private expense, such as for a new car or a trip to Bali, you can only claim an interest deduction for the portion relating to producing your rental income.'

Loh was especially keen to remind Australians that working from home does not excuse them from the proper filing of their tax returns. He pointed out that the ATO's method of calculating work-from-home expenses has changed and advised against using the 'copy and paste' tax return method.

Common Tax Deductions for Landlords​

In today's rapidly advancing technological landscape, it is crucial to stay vigilant about financial matters while considering the potential impact of artificial intelligence on job markets. As we navigate this changing landscape, it is wise to heed Loh's advice and ensure that our financial affairs remain transparent and lawful.

For individuals who derive income from rental properties, it's important to understand the implications for tax purposes. According to MySmartMove, Claiming deductions on your tax return can serve as an effective strategy to minimise the amount of income tax you owe. Landlords, who are considered to be operating a business, have access to a variety of deductions that can significantly reduce their tax burden.

View attachment 19828

One of the most substantial deductions available to landlords is mortgage interest. This cost is directly associated with generating rental income and can be claimed as a deductible expense. Furthermore, landlords can deduct expenses related to repairs and maintenance, advertising costs, property-related taxes, and utility bills such as water, gas, electricity, and rates.

To ensure that you maximise your tax benefits as a rental property owner, it is advisable to work with an experienced accountant. They can guide you through the process of identifying and claiming the appropriate rental deductions each year. By leveraging these deductions effectively, you can not only reduce your tax liability but also save a significant amount of money.

Considering the potential impact of technology on job markets, it is essential to adopt a proactive approach to financial matters. By adhering to Loh's advice and remaining diligent with your tax obligations as a landlord, you can navigate the changing landscape while safeguarding your financial wellbeing.

SDC Members, it's essential to stay informed about these potential changes to the tax process, particularly for those of us managing rental properties or earning income through short-term rental sites. Staying aware and acting accordingly will certainly help us avoid any unexpected run-ins with the ATO while also allowing us to sleep better at night.

Key Takeaways

• The ATO is cracking down on landlords submitting dodgy tax returns, as well as those working from home and earning income from short-term rental sites like Airbnb or Stayz.
• An $89.6 million funding boost to the ATO is expected to increase Tax Office receipts by $474.9 million over five years.
• The tax gap was $9 billion in the 2019-2020 financial year, with deductions for rental expenses contributing $1.3 billion to the gap.
• Assistant Tax Commissioner Tim Loh encourages rental property owners and their registered tax agents to review their records before lodging their return and warns against the 'copy and paste' tax return method.

So, remember to double-check all your income sources, deductions, and expenses before submitting your tax returns this year, and always consult with a registered tax agent if you're unsure about anything. Let's face it, folks—none of us wants to be at the wrong end of the ATO's crackdown!

 

[kevinwoodtufftyke52@gmail]

It's about time the Government removes negative gearing. Too much of a tax dodge.

 

[DGJ132]

It's about time the Government removes negative gearing. Too much of a tax dodge.

The ATO states "interest you paid on money you borrowed to purchase income-producing investments" is a tax deduction for a business so therefore the same needs to apply for residential investment. If anything we need more incentives from within the country rather than overseas acquisitions of residential property. Ultimately the investment will become profitable and on sale the capital gains will be taxed.

 

[SteveT01]

OK. Let's do the math. (This illustration is simplistic and the exact numbers here don't work, but the theory still applies to real-world investing. I know because this is my story.)

Player 1: Has $400,000 and buys one property to live in. No tax breaks. The net gain to the housing stock = 0. (Add one, then use it for self = 0)

Player 2: Also has $400,000, borrows $1.2m (4 x $300,00) to buy four properties and rents them out. Gets tax breaks on the interest and costs to compensate for the personal risk of borrowing and ensure day-to-day cash flow, while four tenants get a place to live in & help pay off the loan. Meanwhile, Player 2 rents someone else's house to live in. Net housing stock gain = 3 (Add four, use one for self = 3)

The moral of this story: It's a win/win for anyone who wants somewhere to live (that's most of us!), and the govt. to encourage "Mum & Dad" investors to use their hard-earned equity to build more than one house, and then rent for themselves.
Win 1: Increases the housing stock and reduces pressure on rent prices.
Win 2: If "Mum & Dad" do it right, they won't need to draw a pension on retirement.

Rent and Rates: Rent rises are, according to the RBA, a major driver of inflation. Why are rents going up? Because the RBA is pushing interest rates up!! Can anyone else see the obvious problem here? If the RBA wants to curb inflationary pressure originating here in Australia, they need to stop raising interest rates on mortgages, which in turn pushes up rents.

Now please stop trying to get rid of "negative gearing" (i.e. tax exemptions any other business would be entitled to) as if that'll fix the housing shortage. Doing so will only make it worse because regular investors like me will put our hard-earned cash somewhere else and stop building all the extra houses our society needs.

 

[DGJ132]

OK. Let's do the math. (This illustration is simplistic and the exact numbers here don't work, but the theory still applies to real-world investing. I know because this is my story.)

Player 1: Has $400,000 and buys one property to live in. No tax breaks. The net gain to the housing stock = 0. (Add one, then use it for self = 0)

Player 2: Also has $400,000, borrows $1.2m (4 x $300,00) to buy four properties and rents them out. Gets tax breaks on the interest and costs to compensate for the personal risk of borrowing and ensure day-to-day cash flow, while four tenants get a place to live in & help pay off the loan. Meanwhile, Player 2 rents someone else's house to live in. Net housing stock gain = 3 (Add four, use one for self = 3)

The moral of this story: It's a win/win for anyone who wants somewhere to live (that's most of us!), and the govt. to encourage "Mum & Dad" investors to use their hard-earned equity to build more than one house, and then rent for themselves.
Win 1: Increases the housing stock and reduces pressure on rent prices.
Win 2: If "Mum & Dad" do it right, they won't need to draw a pension on retirement.

Rent and Rates: Rent rises are, according to the RBA, a major driver of inflation. Why are rents going up? Because the RBA is pushing interest rates up!! Can anyone else see the obvious problem here? If the RBA wants to curb inflationary pressure originating here in Australia, they need to stop raising interest rates on mortgages, which in turn pushes up rents.

Now please stop trying to get rid of "negative gearing" (i.e. tax exemptions any other business would be entitled to) as if that'll fix the housing shortage. Doing so will only make it worse because regular investors like me will put our hard-earned cash somewhere else and stop building all the extra houses our society needs.

 

[DGJ132]

Makes perfectly good sense. Apply for a role in the RBA.

 

[MaggieAmalia]

OK. Let's do the math. (This illustration is simplistic and the exact numbers here don't work, but the theory still applies to real-world investing. I know because this is my story.)

Player 1: Has $400,000 and buys one property to live in. No tax breaks. The net gain to the housing stock = 0. (Add one, then use it for self = 0)

Player 2: Also has $400,000, borrows $1.2m (4 x $300,00) to buy four properties and rents them out. Gets tax breaks on the interest and costs to compensate for the personal risk of borrowing and ensure day-to-day cash flow, while four tenants get a place to live in & help pay off the loan. Meanwhile, Player 2 rents someone else's house to live in. Net housing stock gain = 3 (Add four, use one for self = 3)

The moral of this story: It's a win/win for anyone who wants somewhere to live (that's most of us!), and the govt. to encourage "Mum & Dad" investors to use their hard-earned equity to build more than one house, and then rent for themselves.
Win 1: Increases the housing stock and reduces pressure on rent prices.
Win 2: If "Mum & Dad" do it right, they won't need to draw a pension on retirement.

Rent and Rates: Rent rises are, according to the RBA, a major driver of inflation. Why are rents going up? Because the RBA is pushing interest rates up!! Can anyone else see the obvious problem here? If the RBA wants to curb inflationary pressure originating here in Australia, they need to stop raising interest rates on mortgages, which in turn pushes up rents.

Now please stop trying to get rid of "negative gearing" (i.e. tax exemptions any other business would be entitled to) as if that'll fix the housing shortage. Doing so will only make it worse because regular investors like me will put our hard-earned cash somewhere else and stop building all the extra houses our society needs.

Excellent advice ty ...

A person i know for many years intended to move across country to live in another state, WA and i became engaged on her behalf to find suitable rental property in a certain location and at as specific price.. which i did and the RE person then and there sent a video on to my friend.
A few weeks later i collected the keys abd went tothe property to inspect its condition and was pleased but noted acceptable wear and tear and held the keys for the family. I had told the agent that there was a indoor cat with themand that was acceptable by the owner/ agent i found out later.
The family relocated due to unforeseen circumstances to their home state after a year and they had a qualified vscate industrial cleaning company do a full total clean of the place and to shampoo and fumigate one room with a carpet in the unit as well and i went to open and then later to inspect their work in progress so i could report to the outgoing tenant the status and quality of the work. I took a video of the premises before they came and a video afterwards. I never told the outhoing tenant or agent. I then turned the keys and told the RE agent how pleased i was with the work the cleaning company engaged had done. The unit had also been gifted a expensive dishwasher by the outgoing tenant excessive in price of rent per week... $799 in fact and it was left behind rather than remove it and send over to their home state as all theirfurniture has been disposed off before they departed .
A few wells later I received a email stating that a retention of $500 from Bond was made due to the cat ripping up the carpet with its claws. A dishonest statement as there was a cat stand that had rope wrapped on it to satisfy any urge by the cat and the carpet was only in one room and the QS bed was extremly so low that there was no way a cat could go beneath it never mind rip it to pieces. I was in disbelief as i saw the room minus bed, i had videos to prove the no damage point but the outgoing tenant said whenu called that there was a dependency on their part for a good reference as prospective tenant as they had just successfully applied after a few weeks successfully for accommodation in their state so to let it go. It would create a potential difficulty for them as rentals were and still are at a premium.
That was so wrong and i was so gifted with a huge understanding on the dishonesty of that RE company who when they knew they had a opportunity over an advantage of a former tenant in another state which they did and they gained a $700 dishwasher and $500 rent. I myself believe in RE integrity is paramount as that is the one thing that could make or break any business and i most definately will
never recommend that company to anyone. I do recognise of course off course that there is good in everyone and i feel communication would have beena better option instead of acceptance on what was invalid action and then disconnecting on my part from the dramas of it all.
I personally have had amazing llords and have been indeed had great relationships with them.

 

[MaggieAmalia]

The Australian Tax Office (ATO) has decided to bring the hammer down on landlords submitting dubious tax returns. With more and more people working from home during these unprecedented times and the rise of home-based businesses and income from short-term rental services like Airbnb or Stayz, it seems the ATO has decided it's time to put an end to this tax fraud.

The ATO's decision comes hot on the heels of an $89.6 million funding boost announced in last week's budget, which is expected to result in an increased Tax Office revenue of $474.9 million over the next five years.

Some of us have had our share of houses, rentals and even the occasional holiday rental or two over the years. Therefore, it's essential to be aware of these changes and ensure that all our tax returns are correctly filed. It’s better to be safe than sorry, dear members.

In the 2019-2020 financial year, there was a tax gap of a staggering $9 billion, with taxpayers paying 94.4% of the total amount theoretically owed to the Commonwealth. Deductions for rental expenses, including those who have incorrectly claimed negative gearing deductions, contributed a sizeable $1.3 billion to this deficit.

View attachment 19829

The ATO is determined to take strong action against landlords who submit fraudulent tax returns. Source: 9news.com.au

Assistant Tax Commissioner Tim Loh has announced that the ATO is cracking down on this issue. 'We encourage rental property owners and their registered tax agents to take extra care this tax time and review their records before lodging their return,' Loh said, according to The Age.

The Assistant Tax Commissioner also provided a handy tip, saying, 'You can only claim interest on a loan used to purchase a rental property to earn rental income—don't forget, if your loan also includes a private expense, such as for a new car or a trip to Bali, you can only claim an interest deduction for the portion relating to producing your rental income.'

Loh was especially keen to remind Australians that working from home does not excuse them from the proper filing of their tax returns. He pointed out that the ATO's method of calculating work-from-home expenses has changed and advised against using the 'copy and paste' tax return method.

Common Tax Deductions for Landlords​

In today's rapidly advancing technological landscape, it is crucial to stay vigilant about financial matters while considering the potential impact of artificial intelligence on job markets. As we navigate this changing landscape, it is wise to heed Loh's advice and ensure that our financial affairs remain transparent and lawful.

For individuals who derive income from rental properties, it's important to understand the implications for tax purposes. According to MySmartMove, Claiming deductions on your tax return can serve as an effective strategy to minimise the amount of income tax you owe. Landlords, who are considered to be operating a business, have access to a variety of deductions that can significantly reduce their tax burden.

View attachment 19828

One of the most substantial deductions available to landlords is mortgage interest. This cost is directly associated with generating rental income and can be claimed as a deductible expense. Furthermore, landlords can deduct expenses related to repairs and maintenance, advertising costs, property-related taxes, and utility bills such as water, gas, electricity, and rates.

To ensure that you maximise your tax benefits as a rental property owner, it is advisable to work with an experienced accountant. They can guide you through the process of identifying and claiming the appropriate rental deductions each year. By leveraging these deductions effectively, you can not only reduce your tax liability but also save a significant amount of money.

Considering the potential impact of technology on job markets, it is essential to adopt a proactive approach to financial matters. By adhering to Loh's advice and remaining diligent with your tax obligations as a landlord, you can navigate the changing landscape while safeguarding your financial wellbeing.

SDC Members, it's essential to stay informed about these potential changes to the tax process, particularly for those of us managing rental properties or earning income through short-term rental sites. Staying aware and acting accordingly will certainly help us avoid any unexpected run-ins with the ATO while also allowing us to sleep better at night.

Key Takeaways

• The ATO is cracking down on landlords submitting dodgy tax returns, as well as those working from home and earning income from short-term rental sites like Airbnb or Stayz.
• An $89.6 million funding boost to the ATO is expected to increase Tax Office receipts by $474.9 million over five years.
• The tax gap was $9 billion in the 2019-2020 financial year, with deductions for rental expenses contributing $1.3 billion to the gap.
• Assistant Tax Commissioner Tim Loh encourages rental property owners and their registered tax agents to review their records before lodging their return and warns against the 'copy and paste' tax return method.

So, remember to double-check all your income sources, deductions, and expenses before submitting your tax returns this year, and always consult with a registered tax agent if you're unsure about anything. Let's face it, folks—none of us wants to be at the wrong end of the ATO's crackdown!