ATO focus on rental property deductions

July 30, 2015

The ATO is increasing its focus on rental property deductions for 2014/2015 and will be writing to rental property owners in popular holiday locations to remind them of their tax obligations.

In particular, the ATO is paying close attention to:

  • Excessive deductions claimed for holiday homes
  • Husbands and wives spitting rental income and deductions for jointly owned properties unequally to get a tax advantage for the highest income earner
  • Claims for repairs and maintenance shortly after a property is purchased
  • Interest deductions claimed for the private proportion of loans

The ATO will also be actively educating rental property owners about what they can and cannot claim. For example, the ATO will be writing to rental property owners in popular holiday locations reminding them to only claim the deductions they are entitled to for the periods the property is rented out or is genuinely available for rent.