‘Dodgy’ landlords using investment properties to evade taxes in the firing line as banks are AUTHORIZED to hand over their private transaction information amid an unprecedented rental crisis
- Australian tax authorities lost $1.3 billion in tax revenue
- The program will be used to monitor tax compliance
- Banks ordered to hand over account details to landlord
Australia’s tax authorities are ordering banks to hand over data on 1.7 million people amid a crackdown on landlords who use investment properties to evade a whopping $1.3 billion in tax.
The government agency announced on April 6 a new data matching program used to audit tax compliance.
The program targets landlords who falsely claim deductions, fail to pay capital gains taxes, and landlords who have not reported rental income and expenses.
The ATO aims to collect data on residential investment loans from fiscal years 2021-22 to 2025-26 in an effort to capture those “who may not meet their reporting or filing obligations.”
Each year, we undertake the property management data matching program to enable us to identify and address a number of tax risks in the property investment market.
Australia’s tax office (pictured) will force 17 financial institutions to hand over private details of 1.7 million people in a bid to crack down on landlords who use investment properties to evade tax
“We expect to collect data on approximately 1.7 million individuals each fiscal year.”
The ATO listed 17 Australian financial institutions, including the four major banks – Commonwealth, Westpac, NAB and ANZ – from which data will be collected.
Data providers are forced to hand over customer identification information – including addresses, telephone numbers, names and date of birth – account numbers and balances, transaction information and rental property information.
The ATO website described the data collection as “coercive” with banks and financial institutions obligated to provide the information.
“To ensure compliance with legal requirements, we obtain data under our formal information gathering powers,” the ATO website states.
“This is a mandatory power and data providers are required to provide the requested information.”
According to a 2020-2021 sample audit, the federal government lost an estimated $9 billion in revenue due to tax evasion and mistakes made by individuals.
The ATO said the net tax gap, estimated at 5.6 percent, was caused by misreporting income and expenditure from rental properties.
The ATO listed 17 Australian financial institutions, including the four major banks – Commonwealth, Westpac, NAB and ANZ (pictured) – from which private data will be collected
“The rent component of the individuals’ tax gap is estimated to be $1.3 billion,” the ATO said The protector.
The ATO believes the program will “promote voluntary compliance” by helping those who prepare their own tax returns through myTax and by providing pre-populated information to tax agents.
Once a relevant case has been identified for administration, the ATO will contact an individual or tax agent to verify any discrepancies.
Individuals and tax advisors have 28 days to respond before the ATO takes administrative action.