The ATO says it is increasing its focus on rental property deductions. It says common errors made by rental property owners include:
- claiming rental deductions for properties not genuinely available for rent;
- incorrectly claiming deductions for properties only available for rent part of the year such as a holiday home;
- incorrectly claiming structural improvement costs as repairs when they are capital works deductions, such as re-modelling a bathroom or building a pergola;
- overstating deduction claims for the interest on loans taken out to purchase, renovate or maintain a rental property.
The ATO has also released a series of short videos which explain the tax implications of buying, owning and selling a rental property.
[LTN 159, 19/8/14]