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ATO cracks down on holiday homes

The ATO is targeting holiday-home owners who are over-claiming on tax deductions for periods when their property isn’t being leased.

Some owners have been rejecting tenants so that their holiday home is available for them to use. They provide their accountants with authority to rent documents to make it appear that they are trying to rent the house. They then use the tax deduction to claim ongoing property maintenance costs to upkeep it for potential tenants.

For example, an investor rented out their holiday home to friends and family at a lower-than-market rate and tried to claim a deduction.

The ATO has risk detection models in place to alert them when taxpayers have unusual rental income and deduction patterns compared to taxpayers with properties in similar locations. The tax office is advising investors to keep thorough records and only claim on a deduction when they have made a reasonable effort to get tenants in their holiday home.

Posted on 1 June '15 by , under Tax.

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The transition to retirement (TTR) strategy allows you to access some of your super while you continue to work.

You are able to use the TTR strategy if you are aged 55 to 60. You can use it to supplement your income if you reduce your work hours or boost your super and save on tax while you keep working full time.

  • Starting a TTR pension: To start your TTR pension, transfer some of your super to an account-based pension. You have to keep some money in your super account so that you can continue to receive your employer's compulsory contributions as well as any voluntary contributions you may be making.
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TTR can help ease your mind as you transition into retirement but it can be a bit complex. Before you choose whether you want to use TTR to reduce work hours or save on tax, or even if you want to use TTR altogether, you should figure out how this will impact all aspects of your finances.

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