As reported recently by The Age and ABC News, the Australian Taxation Office (ATO) is targeting property investors particularly taxpayers who may have made mistakes, errors or false claims on their tax returns in relation to property owned for investment purposes.

Common examples of areas the ATO are examining in detail include:

• interest expense claims for an investment loan;

• classification of expenses between capital works or repairs and maintenance; and

• deductions on investment properties in holiday areas.

At Sladen Legal, we have experienced an increase in the number of taxpayers seeking advice on a tax audit relating to owning investment properties. Tax audits are extremely stressful and often a drawn out and complicated process. We highly encourage taxpayers get proper tax advice if their rental property is subject to an ATO audit.

Evidence is key. Taxpayers should be mindful that they bear the onus to discharge the burden of proof. It is highly recommended that written evidence be retained at the time of a particular transaction or when a key decision is made.

If you own a property for investment purposes, ensure letting arrangements are in writing and any loans and evidence of any renovations, repairs and maintenance undertaken are documented and retained.

If you wish to know more about tax audits or have a similar issue at hand, please contact us.

Kelvin Yuen
Lawyer
Sladen Legal
T +61 3 9611 0177
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia
E: kyuen@sladen.com.au

Neil Brydges
Principal Lawyer | Accredited specialist in Tax Law
Sladen Legal
M +61 407 821 157 | T +61 3 9611 0176
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia  
E: nbrydges@sladen.com.au

Sam Campbell
Associate | Business Law
Sladen Legal
M +61 423 515 454 | T +61 3 9611 0135
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia
E: scampbell@sladen.com.au