Exactly when numerous Australians are thinking about escaping for a mid-winter break, the ATO is reminding citizens that it is giving careful consideration to investment properties situated in mainstream occasion goals around Australia.

The ATO as of late issued an announcement saying that last year it recognized countless with findings for investment properties, especially as to occasion homes. It asserts that it saw a few people guaranteeing conclusions for occasion homes even where the property is not really being leased, or not "truly accessible" for lease.

While obviously there is no issue with individuals utilizing their investment property for an occasion, the ATO is making careful effort to call attention to that occasion mortgage holders need to recollect that they can just claim impose conclusions for costs made amid a period when the house is leased or truly accessible for lease.

It also emphasises that property owners need to understand that if they rent their property at a discount, or “mates rates”, they can only claim deductions equal to the amount of rent charged. The ATO cites one case where the taxpayer had to pay back more than $45,000 in tax from deduction claims made for a holiday home they were renting out to friends and family below the market rate.

Property owners should be aware that technology enhancements and the ATO’s extensive use of data is allowing it to identify claims that can be deemed suspect, or in need of checking, now more than in past income years.

There is of course nothing untoward with rental property owners claiming a deduction on expenses for an investment property when it is rented out — this is a stalwart of the tax regime concerning investment property. But even if it isn’t rented out, it is still possible to claim a deduction if the property is “genuinely available” for rent.

To guarantee claims made with respect to occasion investment property are more averse to be tested by the ATO, there are four inquiries to remember.

How do you advertise your rental property?

Owners need to advertise in a way that boosts introduction to potential occupants, for example, an online website. Promoting in ways that limits presentation to potential occupants, for example, by listening in on others' conversations, can imply that the ATO has more motivation to think the property may not be "really accessible" for lease.

What location and condition is your rental property in?

It is important that the rental property is in a location, and maintained in a condition, that tenants will want. If the property is poorly cared for, or in a remote and uninviting area, it is unlikely to be tenanted, and may not pass an ATO assessment as being genuinely available.

Are there reasonable conditions for renting the property, and is the rent charged at market rates?

If an owner places unreasonable conditions that reduce the likelihood of the property being rented out, such as setting the rent above the market rate, the property may not be considered genuinely available for rent.

Likewise, if you, your family or your friends stay for free, your property will not meet the criteria during that time period. If the property is being tenanted at a discounted rate (“mates rates”) then the allowable deductions are limited to the amount of rent charged, not market rates.

Are interested tenants accepted, unless there is a good reason not to?

In the event that a proprietor declines to lease the property to intrigued potential inhabitants without a justifiable reason, this shows they might not have a certifiable aim to make pay from the property and could be holding it for private utilize. For this situation, the property will most likely not meet the ATO's criteria for being truly accessible for lease.

Tax Store Accountants Bankstown.

Tax & Super Australia: ATO waves a red flag