Rental Property Investors What You Can and Can’t Claim?


Tax Refund


Rental properties have been on the ATO radar. With the surge in real estate sales, especially residential investment properties, the ATO has taken a close interest in the expense claims property investors make concerning their rental properties.

ATO’s Radar on Rental Property Claims for 2015  

The Australian Tax Office (ATO) has expanded its audit coverage of individual taxpayers and property investors using the new sophisticated data-matching compliance technique to identify areas that require specific attentions.

For 2015 tax year, the ATO is focusing on a broader range of the following areas:

(a) Rental properties – There will be increasing compliance on the rental property

deductions such as:

  • Claiming for purchase-related capital costs associated with buying a rental property;
  • Claiming deductions for properties that are not genuinely available for rent, or which are only available for rent for part of the income year;
  • Claiming deductions before a rental property is actually rented or available for rent;
  • Claiming borrowing expenses in a single year, instead of being spread over 5 year as the law requires;
  • Claiming renovation costs as repairs and maintenance instead of being attributed to the capital cost of the property.

(b) Work related expenses – Extensive data analysis will be applied to expenses such

as claims for overnight travel, reasonable travel allowance expense claims, claiming

the work-related proportion of computers and similar devices (e.g. Ipads).

(c)  The 6-months overlap rule for changing PPR

(d)   Capital gains on granny flat or similar backyard arrangement – CGT

treatment of such arrangements can be quite confusing thereby potentially creating

audit traps for individuals

We can assist you to claim the maximum deductions to reduce your tax and maximise your refund. Lee and Lee are property tax specialists who are here to work with you to optimize your tax and take control of your developments.


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