Figures from the ATO confirm that tax breaks for housing are out of control with investors claiming $30 billion in rental losses, including millions on travel, stationery and ‘sundry’ expenses.
At a time when 1 in 5 renters are in housing stress it is offensive that tax rules allow investors to claim losses against not just their rental income, but against their salary and wages.
In the 2008/2009 financial year, 41,915 taxpayers earning over $180,000 a year claimed losses on their rental property worth $493 million. That’s a deduction of over $11,000 each, making housing not just shelter but a tax shelter.
The schedule of deductions in 2008/09 showed that investors in rental property claimed:
- $329m in travel expenses
- $49m on stationery, phone postage
- $738m in ‘sundry’ expenses
Despite receiving $24 billion in rental income – investors ended up claiming a massive $30 billion in losses, allowing them to avoid $6 billion of their tax obligations.
Tenants who faced a 7% rent increase that year will be wondering whether $329 million in travel costs and $738 million in unspecified expenses was a great use of their tax dollars.
The tax summit next week must address these loop holes to ensure that we have a tax system that encourages a fair and orderly housing market that delivers for all Australians as opposed to one that encourages speculation and drives up house prices.
- Sarah Toohey