In 2017 the ATO announced 9 out of 10 property investors make mistakes. Years later, the error rate hasn’t budged, says the ATO, but their AI’s appetite for your data has. Bank feeds, rental bonds, loan details… they’ve got the lot.
Tips for Property Investors to make the ATO’s bots work harder than they bargained for:
Maintain itemised depreciation for your properties – claims change as assets are replaced or upgraded across the years so be sure not to just claim the annual amounts noted in your schedule and forget about it.Tracking the itemised items lets you know exactly which assets you own, when they were added, and when they were replaced. This means you can maximise deductions year to year and have proof ready if the ATO wants the backstory. And yes, they data-match with depreciation schedule providers, so they’ll know if something’s missing.
Get DIY right now to avoid problems later – The ATO is laser-focused on capital gains deductions, and structural improvements are firmly in their sights. So if you’re taking on DIY projects, be sure to split out materials and tools, and remember your own labour isn’t deductible (no matter how many weekends you sacrificed). Keep every related expense grouped and well-documented – because when you sell, those improvements can increase your cost base, reduce your CGT, and keep more money in your pocket. And one last watch-out: repairs done straight after settlement are usually considered “initial repairs,” which means they must be capitalised, not claimed as an immediate deduction.
Apportion loans correctly – The ATO’s data-matching bots don’t just skim your loan statements – they track redraws, offset activity, and refinancing like forensic accountants on a caffeine high. Here’s how it works: interest should be claimed based on the use of the funds, not just the property the loan is secured against. Apportioning isn’t guesswork, be sure to calculate the percentage from the funds actually applied to each property. Mixing private and investment debt in one facility complicates claims, so keep loan splits clean and records tight. Document your method, apply it consistently each year, and re-calculate whenever redraws, refinances, offsets or usage change.
Declare all property income and apportion with precision – Whether you’re renting out a room, listing on Airbnb for a few months, or mixing private and investment use, the bots will notice. They match your income with platform data, utility changes, and even your bank feeds. If things don’t line up, expect questions. Keep clear records showing exactly how you calculated your claim percentage, and ensure it aligns neatly with the bank data.
Track every expense source – Every dollar adds up: mortgage interest, body corporate fees, insurance, utilities, repairs, maintenance, stationery – the lot. Go digital to ditch the spreadsheets, store documents permanently, and keep a complete history that helps maximise CGT deductions over the years while protecting any grandfathered rules or entitlements. When everything aligns with your bank feed data, nothing slips through the cracks. After all, the ATO has the data and the tech – and if you want to stay ahead, you need them too.
TaxTank advantage: Automatic depreciation updates, CoreLogic valuations, permanent records, and loan split tracking, which is all the data the bots watch, but airtight and accurate. With live bank feeds, expense tracking, and secure document storage, TaxTank keeps every detail in order year-round, maximising deductions today and protecting you from costly surprises (or CGT shocks) tomorrow.
Because if the ATO’s using tech to find mistakes, you should be using it to make sure there aren’t any.
Don’t be the 9 in 10. Join the smart property investors who have every detail in order. Try TaxTank free today and see how easy it is to get it right, year after year.
