The ATO has issued an early warning again this year.  As tax time is nearing to an end for EFOY16 (yes that was quick), the ATO is reminding all residential property and holiday home investors to get in order your deductions as they intend to review this sector for discrepancies.  Refer to the following link: :   https://www.ato.gov.au/Tax-professionals/Newsroom/Your-practice/Deductions-for-rental-property-owners/?tpissue-10-2016

In particular, all your expenditure and capital allowances must be recorded, apportioned correctly and accurately in accordance with the current legislation.  If you have made some profit in selling your investment property this financial year, the transaction may have resulted in a capital tax gains (CGT) event, and if not treated properly could result in a larger tax payment due than originally thought.  You must also have sufficient evidence your property was income producing thus providing you a trigger to claim any deductions.  Refer to the following link for a detailed explanation of what you may require for EOFYS 2016 on your residential property:  https://www.ato.gov.au/General/Property/Residential-rental-properties/

If you have a holiday home the ATO will be right on to you as well, especially if you have not declared any income but claimed deductions throughout the year. If you have some income, you may need to apportion your deductions with regards to private use and investment/rental use.  Refer to the following link for a detailed explanation of what you may require for your EOFY 2016 return:  https://www.ato.gov.au/General/Property/In-detail/Holiday-homes/

Should you wish to discuss your property and ensure you are maximising your tax deductions with the correct legislation categories and therefore increase your after tax cash position, please do not hesitate to contact any of our Property Depreciation Managers throughout Australia.

Remember, before the game changes again, June 30 is only a couple of months away, so get your property investments sorted early and maximise your claim while you can.

Have a safe Easter and beware your waist will not depreciate if you have too much chocolate!

Paul Mazoletti
National Tax Director