Land tax - how does the OSR know your property has been rented out?

Discussion in 'Accounting & Tax' started by scientist, 7th Aug, 2020.

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  1. scientist

    scientist Well-Known Member

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    I'm in NSW if that matters

    I know this is all likely conjecture but I'd still appreciate your guesses. Which database are they relying on? the bonds board (i.e. if a bond is lodged against your property then that indicates a tenant lives there)? your last tax return? service nsw's driver's licence addresses? electoral roll?
     
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    OSR rely on range of datamatching

    First step is that each ownership of land is supposed to be registered for land tax and the owner should elect a PPOR for exemption which is faxct based (and often subject to a qualifying period of 6 months). This then assumes other land is taxable unless a further exemption is allowed on request.

    Then OSR match to a range of data such as tenancy databases, lease records, rental bond (Fair Trading), council rates notices and addresses, driver license (eg tenant!!) and similiar data with service NSW, water rate and other billing data such as electricity that is registered to a occupant. Public data can include matters like electoral roll data. Even ATO data !! The ATO is limited in what data they can give OSR but the ATO can indicate variances between addresses for example. eh here is a list of properties reported as earning rents. OSR then match that back to council and state title records.

    I often hear people say - Oh I will just put my license and electoral roll details as the IP. Oh thats fine but what happens when the tenant also does that for their license, voting, car rego, toll tag etc. Even passport and credit card details use addresses that tend to be maintained. Medicare too. Ping.

    Then three years later OSR detect the issue and impose arrears. It could be non-deductible by that time.

    You know how Facebook seems to know who you know ?....same technology can be applied by Govt using computers. People arent that smart. I had someone approach me as they had a property inherited from a decaesed relative. They thought not changing title would double dip land tax thersholds and be tax free. OSR eventually asked more questions and observed that the owner appears deceased and sought more information. Worst case selling a property triggers land tax clearance.

    I recently had a client detected for failure to pay stamp duty on a purchase. I had raised it years and years earlier. Property had been sold 4 years ago which is when I noted it had never been paid. They chedked with solicitors who agreed it had no record of payment. OSR found it and imposed a liability with huge penalties and interest 8-9 years after it should have been paid. They have systems !! I had never seen this error and solictors told them OSR can impose a liability despite no longer owning the land.
     
    Last edited: 7th Aug, 2020
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  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    It doesn't matter, all that matters is where the property is located.
     
  4. ttn

    ttn Well-Known Member

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    what matter most is if the land value exceed the tax threshold?
     
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  5. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Most states also have access to shared economy property data ie Airbnb, stayz, booking.com.

    Hover over a red dot for example :)
    Inside Airbnb: Sydney. Adding data to the debate.

    A red dot may indicate a room for rent or a entire dwelling. Occupancy data etc.
     
  6. skater

    skater Well-Known Member

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    Sydney? Gold Coast?
    It doesn't matter which one. All you need to know is that they will find out.
     
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