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Do you own an investment property or luxury lifestyle assets such as a boat, a high-end vehicle, or even an aircraft? If so, the Australian Taxation Office (ATO) is keeping a close eye on these assets to ensure that what is declared in tax returns aligns with the actual financial and asset data.

In a recent move, the ATO launched two new data-matching initiatives specifically aimed at investment property owners and individuals fortunate enough to possess high-value lifestyle assets.

Investment Properties: Increased ATO Focus

Investment properties have long been a focal point for the ATO, especially when it comes to ensuring correct reporting of rental income and deductions. Building on previous data-matching efforts that examined data from residential investment property loans and landlord insurance, the ATO has now extended its reach. From the 2018-19 financial year through to the 2025-26 financial year, the ATO will collect data from property management software.

This data capture includes a wide range of information:

  • Owner identification details: This includes personal information such as names, addresses, phone numbers, dates of birth, email addresses, business names, and Australian Business Numbers (ABNs) where applicable.
  • Property details: Information like property addresses, the date the property was first made available for rent, as well as details of the property manager (including their ABN and license number).
  • Property transactions: Detailed records of rental income and expenses, covering transaction periods, descriptions, amounts, and rental account balances.

While this new program is a significant step, it complements the ATO’s ongoing collection of property transfer data from state and territory governments since July 1, 2016. This means that property transfers are regularly reported to the ATO each quarter.

The latest data-matching initiative is aimed squarely at landlords who:

  • Fail to submit required rental property schedules when required;
  • Underreport or omit rental income;
  • Incorrectly claim deductions;
  • Omit or inaccurately report Capital Gains Tax (CGT) information.

Lifestyle Assets Under Review

In addition to investment properties, the ATO is also tightening its oversight of high-value lifestyle assets by working with insurance providers. Through this partnership, the ATO can cross-reference ownership of luxury assets, such as:

  • Caravans and motorhomes valued at $65,000 or more;
  • Motor vehicles, including cars, trucks, and motorcycles, valued at $65,000 or more;
  • Thoroughbred horses valued at $65,000 or more;
  • Fine art with a valuation of $100,000 or more per item;
  • Marine vessels valued at $100,000 or more;
  • Aircraft valued at $150,000 or more.

The ATO will collect substantial information from these insurance providers, including personal details of policyholders, asset purchase prices, identification details, and the primary use of the asset.

These efforts are designed to identify cases where individuals or businesses:

  • Accumulate or improve assets without reporting these acquisitions in their tax returns;
  • Dispose of assets without declaring income and/or capital gains;
  • Incorrectly claim Goods and Services Tax (GST) credits;
  • Fail to report fringe benefits tax (FBT) when assets owned by a business are used for personal purposes.

What This Means for Taxpayers

The ATO’s data-matching programs serve as a reminder that accurate reporting is essential. Whether it’s a rental property or a luxury lifestyle asset, ensuring that all income, deductions, and disposals are reported correctly can help avoid unwanted scrutiny. The ATO’s access to increasingly detailed data means that discrepancies are more likely to be caught, and penalties may apply for non-compliance.

Pitt Martin Group is a CPA accounting firm, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, membership certification of the Australian Society of Certified Practising Accountants (CPA), Australian Taxation Registered Agents, certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

By Zoe Ma @ Pitt Martin Tax