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ATO chief warns data could end year-long holiday home tax breaks

The government will target Airbnb owners claiming tax deductions when they are not being rented.

The government will target Airbnb owners claiming tax deductions when they are not being rented.

New data collection methods could end the days of short-term rental property owners claiming tax deductions when the home is not being rented.

Prime Minister Anthony Albanese has vowed to raise the issue of the owners of holiday rentals or Airbnbs claiming tax deductions for the property for the full year, even when they are not being used for the entire 12 months.

The promise when he was asked on Sydney radio whether a crack down was needed on the practice.

“We have increased resources for the Australian Tax Office to ensure compliance, but I will raise with the tax commissioner the issue,” he told ABC Radio on Wednesday.

“If you’re Airbnbing then you are engaged in investment, you’re producing a return, and that’s why that (practice) would apply.”

Outgoing ATO commissioner Chris Jordan said data from platforms such as Airbnb or utility companies were helping to more accurately determine how long short-term rentals were being used.

But he said most of the information gained by the tax office used to calculate deductions was done so by an honour system by property owners.

“We can assure a lot of income and a lot of the deductions that (property owners) pay, but we do operate a self-assessment system in Australia,” he said in a speech at the National Press Club.

“With all the platform providers, we now get feeds of information … we now know from places like Airbnb and Uber who is using their platform for payment, so we can see the income side now.”

Jordan said the tax office sometimes had no choice but to rely on self-reported data, but new information was making it less likely the deductions could be gamed.

“When people say (the property) was empty, if we get the electricity, food and it shows consumption was being up, it doesn’t look like it’s empty,” he said.

“It’s all the ability to use data in a much more proficient way to match and get a better position. It is complex, it’s not just the Airbnb, but it’s just rental properties generally.”

-AAP

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