Dodgy landlords’ social media accounts will be put under the blowtorch by the ATO as they crack down on incorrect rental deductions.
Accommodation booking websites will also be examined to make sure landlords are not making false claims simply to get money back.
In the 2017-18 financial year more than 2.2 million Australians claimed more than $47 billion in rental deductions.
The ATO said it would double the number of audits to run a fine tooth comb over rental deductions and assistant commissioner Gavin Siebert warned it’s on the top of his hit-list at this upcoming tax time.
“A random sample of returns with rental deductions found that nine out of 10 contained an error,” he said in an issued statement.
“We are concerned about the extent of noncompliance in this area and will be looking very closely at claims this year.”
Examples of dodgy claims include:
• A taxpayer was penalised $12,000 for over-claiming deductions for a holiday home when it was not made available for rent, including being blocked out for peak season holiday periods.
• A taxpayer had to pay back $5500 because they failed to apportion their rental interest deduction to account for redraws on their investment loan used to pay for living expenses.
The ATO said it would use extensive data obtained from financial institutions, property transactions, rental bonds from all states and territories and online accommodation booking platforms.
“Once our auditors begin they may search through even more data including utilities, tolls, social media and other online content to determine whether the taxpayer was entitled to claims they’ve made,” Mr Siebert said.
Deakin University associate professor and tax guru Adrian Raftery said it was good dodgy landlords had become a focus of the ATO.
“Some landlords have been using a property for private use but it’s not available for 52 weeks of the year and they are still claiming 52 weeks of interest,” he said.
“Or they may be partially living in the place, especially in this Airbnb type environment and the sharing economy.”
Dr Raftery also said depreciation claims had been problematic with incorrect claims being made.
“I think the ATO will be very successful in some tax revenue collection in relation to this,” he said.
Penalties do not apply to those amending their returns who have made genuine mistakes but deliberate over claiming can attract penalties of up to 75 per cent of the claim.
In 2017-18 the ATO audited more than 1500 taxpayers on their rental claims and executed penalties totalling $1.3 million.