Rental Reductions Under a Microscope

Jhai Mitchell

CPA Australia has advised Australia’s 1.5 million taxpayers who own rental properties that the ATO will be increasingly vigilant in auditing rental deductions as rental losses to grow.


The ATO plans to examine 6,000 at-risk cases as well as unusual patterns of rental claims.



Last year, the ATO sent out 65,000 review letters and completed 6, 700 reviews or audits which raise additional tax revenue of $8.4 million.


The ATO’s audits will focus on incorrect apportionment of interest claims, excess deductions for capital works, non-deductible initial repairs and borrowing costs claimed as fully deductible in the year they are paid.


CPA Australia advises rental property owners to have up-to-date records and copies of all relevant receipts.


Fast Facts Proportion of family income required to meet:


Home Loan Repayments – 38%


Rent Payments – 24.7%