PROPERTY investors need to watch out because they are probably on the Australian Taxation Office’s hit list this year for a tax check.
More than 1.4 million people claimed more than $21 billion in rental deductions in their 2005-06 tax returns.
This financial year, the ATO has written to 45,000 individuals considered at risk of not complying, reminding them to check the accuracy of their claims before lodging returns.
According to the ATO, it will examine about 6000 at-risk cases. It will check the accuracy of capital gains declared by investors and match the data against records from state and territory revenue and land-title offices. It will also check figures provided by investors to third parties such as banks.
Yet, the fact remains, the opportunity for deductions in investment properties are often greater than for borrowing to invest in shares because of the number of deduction possibilities. More…