Every year, there seems to be a industry or demographic target for the ATO, and this year, the crackdown is on property investors.

The ATO can force banks to provide data on property investors, to make sure they are filing tax returns correctly.
It was reported that they were endeavouring to collect data on 1.7 million property investors to pursue what is estimated to be $1.3 billion in missing taxes.
The financial institutions are obligated to provide this information, and I have seen it previously where the ATO have used this power to obtain information from another source which was not a financial institution. If the information exists, they have the use of “formal information gathering powers”.
According to the ATO, the most common tax errors made were:
- Mis-claiming improvements as repairs rather than capital works (this is very common and may be a genuine error if you are not getting the right advice)
- Not apportioning mortgage interest costs after refinancing for private purposes (or doing so incorrectly)
- Not apportioning expenses for private use of the property
In my experience, I have heard of similar types of errors, through no ill intention of the investor, but through a lack of record keeping, poor advice and typically these are for property holdings over a long period of time.
We all know the 5 or 7 year rule to hold onto documentation (depending on what the information is) but what if you held a property for 15 years – would you be able to record information from 12 years ago? I doubt I could!
I personally run a paper free life and paper free business. Not only did I want to see this change for the environment, but the ease at being able to recall any information I like, at any time, sure makes life easier!
It also secures my information against theft or fire, and I have other practices around password security to ensure the data I store remains secure.
I love keeping everything in my phone, and use multiple password apps, authenticator apps, and regularly review and change passwords.
What are your record keeping processes? Could you locate a tax invoice from 2017? Is it time to upload your property paperwork to the cloud?
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