Do you own an investment property or an expensive lifestyle asset like a boat or aircraft?
The ATO looks closely at these assets to see if what you declare in tax returns matches up.
The Australian Taxation Office (ATO) has initiated two data-matching programs impacting investment property owners and those lucky enough to hold expensive lifestyle assets.
Investment property
What investment property owners declare and claim in their personal income tax returns is a constant focus for the ATO. Coming off the back of data matching programs reviewing residential investment property loan data and landlord insurance, the ATO has initiated a new program capturing data from property management software from the 2018-19 financial year through to 2025-26. Data collected will include:
- Property owner identification details such as names, addresses, phone numbers, dates of birth, email addresses, business names and ABNs, if applicable;
- Details of the property itself – property address, date property first available for rent, property manager name and contact details, property manager ABN, property manager licence number, property owner or landlord bank details; and
- Property transaction details – period start and end dates, transaction type, description and amounts, ingoings and outgoings, and rental property account balances.
While the ATO has committed to specific data matching campaigns since 1 July 2016, it has also collected data from state and territory governments, which are required to report real property transfers to the ATO each quarter.
This latest data matching program ramps up the ATO’s focus on landlords, specifically targeting those who fail to lodge rental property schedules when required, omit or incorrectly report rental property income and deductions, and omit or incorrectly report capital gains tax (CGT) details.
Lifestyle assets
Data from insurance providers is being used to identify and cross-reference the ownership of expensive lifestyle assets. Included in the mix are:
- Caravans and motorhomes valued at $65,000 or over;
- Motor vehicles, including cars & trucks and motorcycles valued at $65,000 or over;
- Thoroughbred horses valued at $65,000 or over;
- Fine art valued at $100,000 per item or over;
- Marine vessels valued at $100,000 or over; and
- Aircraft valued at $150,000 or over.
The data collected is substantial, including the policyholder’s personal details, the policy details, including purchase price and identification details, and primary use, among other factors.
The ATO is particularly focused on tax compliance issues related to lifestyle assets. They are looking for those who accumulate or improve assets without reporting them in their income tax return, dispose of assets without declaring the income and/or capital gains, incorrectly claim GST credits, and, most importantly, omit or incorrectly report fringe benefits tax (FBT) when the assets are held by a business but used personally.
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