As the deadline of 31 October 2024 approaches for lodging your tax return, REIWA has issued a press release to remind property owners of a few important tax tips for those who haven’t yet lodged their 2023-24 tax returns.
REIWA is advising that the Australian Taxation Office (ATO) has introduced enhanced data-matching systems to ensure all property income is accurately reported. The software works by cross-referencing information from various sources like property management software, banks, landlord insurers, rental bond authorities, and even sharing economy platforms. This means it is much easier for the ATO to track and find incorrectly declared income.
If the system detects discrepancies, the ATO may contact you to explain so here are some friendly reminders to help you prepare your tax return correctly:
– Declare All Rental Properties: include all your rental properties in your tax return, even if you’ve recently purchased one with tenants still in place.
– Report Total Rental Income: report the full amount of rental income you’ve received before expenses. You can claim deductions separately.
– Understand Your Expenses: Differentiating between capital expenses, repairs, and maintenance is important, as they are claimed over different periods.
– Shared Ownership: If you co-own a property, income and expenses should be split according to legal ownership. Each owner needs to lodge their own tax return.
Selling Your Home? Understanding the Main Residence Exemption
Selling your primary residence is a significant milestone, and there may be tax implications to consider. While you may qualify for an exemption from capital gains tax (CGT) as your primary residence, earning income from your main residence—like renting out a room or running a business from home—could affect this exemption.
If you’re unsure about any details, please be sure to contact your trusted tax professional.
