Fraudulent Holiday Homes Deductions

The ATO is on the lookout for fraudulent holiday homes deductions.

Do you know that holiday home deductions can only being claimed to the extent that it was rented out, not while you come and stay there for your winter or summer holidays.

According to the assistant commissioner of the ATO, Kath Anderson, expense claims amounting to thousands of dollars for occasionally rented holiday homes fail the pub test and will be subject to the ATO’s crackdown on property deductions.

She stated that 2.2 million property owners filed $42.6 billion in rental expense claims in 2021, but full compliance by the sector would add $1.6 billion in revenue, and she urged tax agents to assist in bringing owners into line.

Ms. Anderson also stated that many returns prepared by agents contain errors, owing to clients’ failure to inform or provide their agents with all of the necessary information.

“We need your help to educate clients about what is a fraudulent holiday homes deductions and what’s not. We also need your help to get the message out there that claiming deductions and effectively taking money from the community to pay for your holiday home is not OK.”

Ms. Anderson declared that the ATO had high-priority rental property claims for 2022-23 to reduce the tax gap from $33 billion to $2 billion. She also addressed the lodgement deferral process, mentioning a new lodgement deferrals function in online services for agents, which will be available in the first part of 2023. The new function is a digitized version of the current spreadsheet, providing a more intuitive lodgement deferral experience with real-time visibility and quicker processing times.