{"id":8608,"date":"2024-06-02T23:04:32","date_gmt":"2024-06-02T23:04:32","guid":{"rendered":"https:\/\/www.tagfinancial.com.au\/blog\/?p=8608"},"modified":"2024-06-02T23:26:42","modified_gmt":"2024-06-02T23:26:42","slug":"ato-puts-spotlight-on-property-investors","status":"publish","type":"post","link":"https:\/\/www.tagfinancial.com.au\/blog\/ato-puts-spotlight-on-property-investors\/","title":{"rendered":"ATO puts spotlight on property investors"},"content":{"rendered":"

\"\"The Australian Taxation Office (ATO) has warned property investors it will pay close attention to their reported income and deductions this tax time, with official data showing that about 90% of investors get their tax returns wrong.<\/p>\n

ATO assistant commissioner Rob Thomson said general repairs and maintenance on your rental property can be claimed as an immediate deduction \u2013 but expenses that are capital in nature (like immediate repairs on a property you just bought or improvements some time after purchase) are not deductible as repairs or maintenance.<\/span><\/p>\n

\u201cWe often see landlords making mistakes when it comes to repairs and maintenance deductions on rental properties, so we\u2019re keeping a close eye on this. This year, we\u2019re particularly focused on claims that may have been inflated to offset increases in rental income to get a greater tax benefit,\u201d<\/span><\/em> he said.<\/span><\/p>\n

\u201cYou can claim an immediate deduction for general repairs like replacing damaged carpet or a broken window. But if you rip out an old kitchen and put in a new and improved one, this is a capital improvement and is only deductible over time as capital works.\u201d<\/span><\/em><\/p>\n

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Variable-rate loans scale new heights of popularity<\/span><\/h3>\n

Back in March 2020, at the start of the pandemic, 13.38% of new borrowers were choosing fixed-rate loans and 86.62% were choosing variable. But in March 2024, a staggering low of only 1.40% of new loans were fixed, compared to 98.60% variable, according to the Australian Bureau of Statistics.<\/p>\n

The reason so many borrowers are going variable right now is because of a widespread belief that interest rates are at or near their peak, which means variable borrowers would benefit from any future rate cuts. Conversely, in July 2021, when interest rates were at record-low levels, 46.02% loans were fixed, while only 53.98% were variable.<\/span><\/p>\n

If you\u2019re wondering whether fixed or variable is right for you, here are the main pros and cons of each option:<\/span><\/p>\n

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Housing assistance scheme achieves big milestone<\/span><\/h3>\n

Are you a first home buyer or single parent who wants help getting a property? If so, you\u2019ll be interested to learn that the federal government\u2019s Home Guarantee Scheme (HGS) has now supported more than 150,000 buyers since its inception in January 2020.<\/p>\n

Eligibility is limited. There are property price caps, which vary from state to state. Income caps also apply \u2013 $125,000 for individuals and a combined $200,000 for joint applicants.<\/span><\/p>\n

The HGS consists of three programs:<\/span><\/p>\n