2019 ATO Focus on Property

Good email from Depreciator. See italics below

Major focus items for the ATO in 2019 for property investors will be :
- Strata levies and incorrect claims for special levies
- Incorrect claims by spouses not based on title
- Repairs & Maintenance claims
- Private use of the property especially those in certain postcodes / areas
- Non-market rent especially to associates & family
- Granny flat undeclared income or overclaim of expenses
- Short stay rents v's deduction claims
- Overclaiming Div 40 depreciation where property using since prior to May 2017 is not continual.
- Unsupported depreciation and capital allowance claims

Chris Jordan from the ATO recently announced that property investors and their deductions were next in his sights after the success of his crackdown on work-related expense.

Apparently, in a test audit of 300 property investors, 90% made errors. With a success rate like that, it’s no surprise the ATO are keen to roll their sleeves up and tackle investors seriously. You can read the full story here.

They will look at interest wrongly attributed and erroneous claims on holiday houses

The treatment of second-hand Assets in residential properties will be a special focus - remember, commercial properties were not affected by the 2017 changes.

It has been almost 2 years since the changes to the treatment of Assets were announced and some Depreciation Schedule providers are still getting it wrong. There are thousands of incorrect Depreciation Schedules out there and they will be landing on accountant desks this tax season.

Another deduction easy to target is the treatment of Special Levies. Too many people just claim Special Levies in the way they claim other strata fees.

Broadly speaking, the purpose of the Special Levy and the length of time someone has owned a property dictate the treatment of a Special Levy.

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