ATO Focus On Holiday Home Rental

The Australian Taxation Office (ATO) is setting their sights on the large number of mistakes, errors and false claims made by rental property owners who use their own property for personal holidays.

Tax payers should be aware that the ATO is focusing on taxpayers who claim deductions for holiday homes that are not actually available for rent or only available to friends and family. You cannot claim for times when you were using it for your own personal holidays or letting friends and family stay rent-free.

According to Assistant Commissioner Kath Anderson, tax payer should also take note that “if their property is rented to friends and family at mates rates, they can only claim deductions for expenses up to the amount of the income received.”

Besides the actual rental amount, ATO is also focused on other times when a property is not rented or genuinely available for rent. Things like unreasonable conditions placed on prospective renters, rental rates set above market rates, or failing to advertise a holiday home in a way that targets people who would be interested in it will all be focused and investigated by ATO.

Below are some general tips from RCB Advisors,

· keep accurate records of the income you receive from your rental property, expenses you incur;

· Keep the evidence of the property being rented or genuinely available for rent at market rates;

· keep records of who stayed at the holiday home and when, including the time you and your family stay at the property.

For further information please contact your RCB Advisors team member

Source: www.ato.gov.au