A Commonwealth Gazette notice has been issued stating that the ATO intends to collect data of individuals renting a premises via online accommodation websites.
These services are usually run via a platform, and data will be released for the 2016/17 to 2019/20 income years. Electronic data will be linked against Australian financial institution data to provide information regarding individual taxpayers to the ATO.
In particular, the online platform will be required to submit the following data relating to the listed accommodation:
- Name of owners
- Addresses (both rental property and residential)
- Date of birth
- Contact details, and
- Whether the entire premises or part was listed.
Also, the listing’s bank account details will be provided as well. It is understood that the ATO will be able to match this bank account to an individual’s tax file number. Generally, a tax file number is requested upon opening any bank account.
The activities of the listing from the online accommodation platform that will be made available include:
- number of nights booked
- price per night
- cancellations
- “blocked-out” dates, and
- gross rental income.
Risk mitigation steps
The objectives of the data matching program are based around promoting voluntary compliance of short-term rental income.
Clients need to be made aware that this information will be directly data matched going forward. This correspondence is necessary even if you have specific questions you ask your clients about whether they receive income from these sources.
Principal place of residence
If a client uses their principal place of residence for short-term accommodation, there is:
- a requirement to declare income received, and
- also a potential for capital gains event to apply on the eventual sale.
ITAA 1997 s 118-185 states that only a partial main residence exemption will apply should the property be used for income-producing purposes during the ownership period.
Rental properties
For properties that are not the main residence of the taxpayer, the ATO is making various investigations surrounding the listing dates from each provider. Therefore, the ATO is able to hypothesise the length of time in which the property in question was listed as “available for rent”. The timing of when a property is available for rent is important from an income tax perspective (discussed further at Landlord’s and lessor’s expenses
Voluntary disclosure
Certain clients may not have been aware that these types of items were taxable in the past. As a result, an opportunity exists to amend previous year’s returns as necessary.
In various protocols issued by the Commissioner of Taxation, individuals making voluntary disclosures in order to become compliant with the law are looked favourably upon. Generally speaking, individuals are not penalised when they are co-operative with the Commissioner.
Source: CCH iQ.
