Tax Office 'Doctors' Are Cracking Down On Rental Property Tax Claims

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A data-savvy team within the Australian Tax Office known as ‘The Doctors’ has identified more than 110,000 rental property owners who incorrectly claimed deductions in their tax returns last year, the SMH reports.

John Collett of the SMH reports that rental property deductions rose 18% in the 2010-11 financial year to almost $39 billion, with investors taking advantage of negative gearing.

The ATO says landlords may claim tax deductions for home improvements, property purchase and tenancy costs, but not:

    • acquisition and disposal costs of the property
      expenses not actually incurred by you, such as water or electricity charges borne by your tenants

          expenses that are not related to the rental of a property, such as expenses connected to your own use of a holiday home that you rent out for part of the year
          borrowing expenses or interest on the portion of the loan you use for private purposes like buying a new car.

        More tips are published on the ATO’s website.

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