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National News Australia

Tax time focus on rental property income and deductions

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Tax time focus on rental property income and deductions

AUSTRALIAN TAXATION OFFICE

Income and tax deductions from rental properties is one of the four key areas the Australian Taxation Office (ATO) is focusing on this tax time. It’s an area that’s easy to get wrong, and needs extra care when lodging. The ATO Random Enquiry Program has found that nine out of ten tax returns that reported rental income and deductions contain at least one error, even though most of those property owners were assisted by a registered tax agent.

The ATO is therefore urging rental property owners to ensure they carefully review their records before declaring income or claiming deductions this tax time, and for registered tax agents to ask a few extra questions of their clients.

Assistant Commissioner Tim Loh explained “Registered tax agents can only work with the information they gather from their clients, and we know some clients won’t know everything they need to tell their agent. We don’t expect agents to be Sherlock Holmes, but we do expect them to ask the right questions to ensure their client’s return is right.”

Mr Loh said that rental property owners are urged to ensure they know what income they need to declare and what can be claimed as a deduction.

“We are concerned about mistakes, and in particular, leaving out income or deliberate over-claiming of rental property deductions this year.”

“Getting it right the first time, will ensure you receive the tax refund you are owed, and avoids us knocking on your front door down the track.”

INCLUDE ALL RENTAL INCOME

The ATO receives rental income data from a range of sources including sharing economy platforms, rental bond authorities, property management software providers, and state and territory revenue and land title authorities.

“The amount of data we access grows each year, making it easier and faster for us to spot any rental income that you have charged your tenants, but haven’t declared,” Mr Loh said.

When preparing tax returns, make sure all rental income is included, such as from short-term rental arrangements, renting part of a home, and other rental-related income like insurance payouts and rental bond money retained.

“Income and deductions must be in line with a rental property owner’s ownership interest, which should generally mirror the legal documents.”

GET YOUR EXPENSES RIGHT

Not all expenses are the same – some can be claimed straight away, such as rental management fees, council rates, repairs, interest on loans and insurance premiums. Other expenses such as borrowing expenses and capital works need to be claimed over a number of years. Capital works can include replacing a roof, or a new kitchen renovation. Depreciating assets such as a new dishwasher or new oven costing over $300 are also claimed over their effective life.

Refinancing or redrawing on a rental property loan for private expenses such as holidays or a new car, means that the amount of interest relating to the loan for the private expense can’t be claimed as a deduction.

If income from a rental property in a holiday location is earnt, it needs to be included in tax returns.

“You can claim expenses for the property to the extent that they are incurred for the purpose of producing rental income, not where your family and friends stayed in the property for a mini getaway at mate’s rates, you use it yourself, say at Christmas, or you stopped renting the property out,” Mr Loh said.

“Other circumstances where deductions cannot be claimed include pretending that your property is available for rent when it really isn’t, for example you advertise significantly above a reasonable market rate compared to similar properties or you place unreasonable restrictions on potential tenants.”

“Our 2022 Tax Time Toolkit for Investors also contains a number of fact sheets for landlords, including Top 10 tips to help landlords avoid common tax mistakes. These tips will help you avoid common mistakes and save you time and money.”

SELLING A RENTAL PROPERTY

When selling a rental property, capital gains tax (CGT) needs to be considered and any capital gains or capital losses need to be reported.

When calculating a capital gain or capital loss, it’s important to get the cost base calculation right. Cost base is usually the cost of the property when purchased and any costs associated with acquiring or selling it. These can be things like stamp duty, legal fees, valuations and real estate sales fees. Any capital works claimed as deductions may also need to be subtracted from the cost base.

“If you’ve sold a rental property that was once your home, you may be entitled to partially claim the main residence exemption. You will need to claim this exemption in your tax return when you lodge.” Mr Loh said.

Records of all income and expenses relating to rental properties, including purchase and sale records, must be kept. This ensures all eligible deductions are captured when preparing tax returns and capital gains tax can be calculated correctly when the property is sold.

“It’s also important to note that when selling any property for more than $750,000, vendors / sellers must have a clearance certificate otherwise 12.5% will be withheld.” Mr Loh said.

Clearance certificate applications can take up to 28 days to process so to avoid delays, sellers should apply as early as practical using the online form. Having tax affairs up to date, including all lodgments, helps speed up the assessment of an application and a certificate being issued. The certificates last for 12 months and if selling more than one property in the year, it can be used for multiple sales. Foreign residents are generally not eligible for a clearance certificate but may apply to vary the withholding amount.

Apply for a certificate and find out more at ato.gov.au/FRCGWcertificate

KEEP GOOD RECORDS TO PROVE IT ALL

Records of rental income and expenses should be kept for five years from the date of tax return lodgments or five years after the disposal of an asset, whichever is longer.

“Get your books in order and start keeping records as soon as you make the decision to earn rental income. It makes tax time so much easier for you and your registered tax agent” Mr Loh said.

Adequate records should demonstrate how the expense was incurred for the rental property and the extent they relate to producing rental income. They must include the name of the supplier, amount of the expense, the nature of the goods or services, the date the expense was incurred, and the date of the document.

“We can ask for proof of any claim that you make, so good record keeping is the only way to ensure you can claim everything you are entitled to.”

“Remember, when your return is lodged, you are on the hook for the claims you are making, not the registered tax agent.”

 

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National News Australia

Victorian driver arrested twice during Operation Brushwood as rural crime-related offences targeted – Murray River

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Operation Brushwood

Victorian driver arrested twice during Operation Brushwood as rural crime-related offences targeted – Murray River

 

A Victorian man has been arrested twice in just over two days by officers targeting rural crime-related offences in the state’s Riverina.

Investigators attached to the Rural Crime Prevention Team (RCPT), established Operation Brushwood to target rural crime-related offences throughout Southern Region.

The five-day operation was conducted in the Murray River Police District between Thursday 28 March 2024 and Monday 1 April 2024.

It was about 3.30pm on Thursday that officers working under Operation Brushwood, arrested and charged a 25-year-old man after he was detected allegedly driving a ute west at 180km/h in a 100km/h zone on the Riverina Highway, Savernake, 100km from west of Albury.

Officers stopped the driver on Corcoran Street, Berrigan, and subjected him to a roadside breath and drug analysis, returning a positive drug test.

When the vehicle was searched, police allegedly seized a machete, and a substance believed to be an illicit drug.

The man, from Kerang in Victoria, was arrested and taken to Finley Police Station when he allegedly returned a positive secondary drug test; this has been sent for further analysis with charges pending on the outcome.

The man was issued an infringement notice for exceeding the speed over 45km/h, and a notice of suspension of authority to drive in NSW. He was issued with a Future Court Attendance Notice (FCAN) for drug possession, and a fine for possession of a machete found in the vehicle. The man’s ute was issued with a major defect notice.

About 10pm on Saturday (30 March 2024), police were patrolling Racecourse Road, Deniliquin, when they stopped the same man driving the same vehicle.

He was subjected to a roadside breath test which allegedly returning a positive reading. Police also allegedly located illegal drugs when the man was searched.

He was taken to Deniliquin Police Station, where he was subjected to a secondary breath analysis which returned a reading of 0.04; however, due to the man’s driving privileges being suspended, he was subject to special PCA limits.

A secondary drug test was also conducted which returned a positive result and the man was suspended from driving for a period of 24 hours.

The man was then charged with four offences:

  • Drive when driver visiting privileges are withdrawn
  • Possess prohibited drug
  • Special category driver drive with special range PCA, and
  • Breach of bail

The man was released on strict conditional bail; however, about 2.50am Sunday 31 March 2024, police were called to Deniliquin Racecourse due to a man driving a ute conducting burnouts. The same man was once again arrested and was taken to Deniliquin Police Station where he was charged with a further four offences:

  • Drive recklessly/prolong, sustain etc loss of traction –
  • Drive when driver visiting privileges withdrawn-
  • Use vehicle in contravention of major defect notice
  • Use registrable vehicle not – display authorised number-plates

He was refused bail and appeared in Wagga Wagga Local Court that day, where he was once again refused bail and remanded in custody to appear in Albury Local Court on 14 May 2024.

During the operation, officers conducted 60 random breath tests, issued 11 traffic infringement notices, conducted seven inspections of licensed premises, made three drug detections, as well as multiple vehicle and person searches, fishing licence and firearm inspections, and campsite inspections at Werai National Park and Murray Valley National Park.

 

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National News Australia

Man charged following aggravated break and enter – Port Kembla

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Port Kembla break and enter

Man charged following aggravated break and enter – Port Kembla

 

A man will front court today, charged with an aggravated break and enter in Port Kembla the Illawarra region.

Police were called to Hixson Street, Port Kembla around 10am (Saturday 6 April), following reports of a break and enter.

Officers attached to Lake Illawarra Police District, spoke to a 51-year-old man who told them three firearms – all registered to the man – were allegedly stolen and an amount of cash.

A crime scene was established and an investigation commenced.

Following inquiries, about 11.45am yesterday (Wednesday 10 April 2024), officers attached to the Lake Illawarra Police District executed a search warrant at a home in Culgoa Crescent, Koonawarra.

A vehicle was seized for forensic examination.

A 36-year-old man was arrested at the scene and taken to Lake Illawarra Police Station.

He was charged with aggravated break and enter – persons home, possess unauthorised firearm.

He was refused bail to appear in Wollongong Local Court today (Thursday 11 April 2024).

Inquiries are continuing.

Anyone with information about this incident is urged to contact Crime Stoppers: 1800 333 000 or visit here. Information is treated in strict confidence. The public is reminded not to report information via NSW Police social media pages.

 

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National News Australia

Two men in Nigeria charged over alleged sextortion which led to Australian boy taking his own life

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Two men in Nigeria charged over alleged sextortion

Two men in Nigeria charged over alleged sextortion which led to Australian boy taking his own life

 

Two males have been arrested and charged in Nigeria over an alleged sextortion offence which led to an Australian boy taking his own life last year.

In 2023, police commenced an investigation into the alleged sextortion of a teenage boy, who is believed to have taken his life as a result of the threats.

Initial inquiries revealed the boy was engaging with an unknown person online, who threatened to share personal photos of the boy with his family and friends if he did not pay $500.

The matter was initially investigated by local police before being referred to State Crime Command’s Cybercrime Squad.

Cybercrime Squad detectives traced the accused to Nigeria, before requesting assistance from the Australian Federal Police to pursue them further.

Investigators from the AFP-led Australian Centre to Counter Child Exploitation (ACCCE) and the Joint Policing Cybercrime Coordination Centre (JPC3) worked with their dedicated Cybercrime Liaison Officer based in South Africa to share intelligence with the Nigerian authorities.

Last month, detectives were informed that two young males – located in a slum in Nigeria with a population of 25 million people – had been arrested and charged over the alleged sextortion offences.

The males will be dealt with locally, where authorities have the power to prosecute for Australian based offences.

Commander of State Crime Command’s Cybercrime Squad, Detective Superintendent Matthew Craft, said the message to young people everywhere is you don’t need to suffer in silence.

“We’ve seen a huge spike in sextortion cases, which are up nearly 400% in the last 18 months – but the good news is people are reporting it and there are steps we can take to help you before it goes too far.

“We want young people to continue to report these cases, and to never be embarrassed to talk to police. Sextortion is a very real crime that we can take serious action against,” Det Supt Craft said.

“These arrests in Nigeria show just how far police are willing to go to seek justice on behalf of our young community.”

AFP Commander Helen Schneider commended the work of NSW Police, ACCCE and JPC3 and said the arrests showed what could be achieved when law enforcement worked together to fight a global problem.

“The sextortion of children is a borderless crime, as these arrests show,” Commander Schneider said.

“The partnerships between law enforcement here in Australia and around the world are vital as we work together to protect children online.”

For more information on sextortion, head to the Australian Centre to Counter Child Exploitation (ACCCE) website or visit eSafety Commissioner website.

 

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