I just found this on Linkedin. Posted by my broker. Read below. Have you ever under-declared your income or over-claimed your expenses while doing your property taxes? If you have, you need to talk to a tax agent immediately and get a tax health-check on any property dealings, according to H&R Block director of tax communications Mark Chapman. Speaking to Mortgage Business, Chapman warned property investors about a new program that the Australian Tax Office (ATO) has launched to make sure that property owners have met their tax obligations. The ATO is planning to dig up the details of all taxpayer’s transactions from 1985, which will include the names of landlords, lease periods, amounts of rental bonds, rents payable, dates of property transfers, and valuation details. More than 30 million records are expected to be cross-checked with information that the ATO already holds. In this way they can build a pretty accurate picture of property-related transactions over the past 30 years. If there are discrepancies, Chapman said the ATO has promised to penalise these property owners. There may be sizeable penalties for not meeting your property tax obligations, and this can be avoided if you correct your mistakes by making a voluntary disclosure before your property and you are placed under heavy scrutiny.
Possibly just an ATO scare tactic to get people to declare ? People dont declare income for years (/decades) and don´t get caught, thousands of IPs are invisible, there is no feedback from real estate agents to the ATO. Or maybe this is a new thing and there will be.
I understand the ATO only goes back 6 years and you only have to keep records for those 6 years. Every 1 July, we light a bonfire and burn all records that are 7 years and older .
No doubt the ATO run lots of cross checks but to me that article. reads like PR material for H&R block, using scare tactics to try to drum up business.
You understand incorrectly. If you are flagged up for an audit, they will look back 6 years. If they have evidence of an incorrectly completed tax return, they can just claim its fraud until you prove otherwise in which case there is no time frame.
Sorry but that noise has been coming from his mouth for at least the last 9 months. Just a scare campaign to drum up business for H&R block. As @kierank mentions you only have to keep records for a few years ( i think it's actually 5 years from lodgement of return).
The length of time is typically a minimum of 5 years after they are prepared, obtained or the transactions completed, whichever occurs latest. HOWEVER, if you are going to sell a property at some point and incur CGT, you'll need to have records of what you paid for it - which may be 30+ years ago - so there is a case to be made for a PI to keep property records forever.
I'd say they won't catch everything & everybody, but they do have a more complete data set with which to potentially go after people. That's the issue with fraud, over time they will continually build a bigger and better model, so stuff done today that they don't look at, may be flagged 5years down the track.
7 yr is from last claimed item ( last tax return ) n not from the start date, this is my understanding
Record keeping requirement is generally 5 years but subject to cost base point identified by @Propertunity: Keeping your tax records | Australian Taxation Office The ordinary amendment period is 2 or 4 years (depending on your tax affairs) but there is no time limit for fraud and evasion. Fraud and evasion requires the taxpayer actually knowing they did the wrong thing. If the taxpayer didn't report income because they incorrectly thought, for example, that the main residence exemption applied this would not be fraud or evasion. Even if the taxpayer just forgot to declare income as an oversight this might not be fraud or evasion. However, if the ATO alleges fraud and evasion then it is up to the taxpayer to disprove this which might be difficult in the "just forgot" case.
