Remember the Terminator? Relentless, data-driven, and always on the hunt?  Well, did you know The Australian Taxation Office (ATO) is ramping up its data-matching efforts, and they've recently launched a new program aimed at high-value lifestyle assets and property owners?  Here's the lowdown on what this means for you...

What Are "Lifestyle" Assets?

The ATO is cracking down on people who own expensive “lifestyle” assets—things like private jets, luxury cars, racehorses, boats, and even fine art. They’re using insurance records to make sure these high-value items are being accurately declared for tax purposes.

They’re planning to go through between 650,000 and 800,000 insurance policies every year, checking that the owners of these luxury assets are meeting their tax obligations. This will happen over the next few financial years (2023-24 to 2025-26). If your asset is valued above a certain threshold, your insurance data will be on their radar.

Here’s a quick look at the asset categories they’ll focus on and their value thresholds: 

The ATO will collect info like the owner’s name, email address, and details about the insured assets from insurance companies. They’ll then cross-check this data with your tax returns to make sure everything matches up—looking for under-reported income and any discrepancies with your tax filings, including income tax, fringe benefits tax, and GST.

Property Owners Under the Spotlight

But the ATO isn’t just focusing on lifestyle assets. They're also keeping an eye on property owners, especially those with investment properties. Data from property management software will be used to track rental income and ensure there’s no funny business—like claiming tax breaks on properties that aren’t actually being rented out or misreporting income.

Every year, the ATO will be reviewing records from around 2.3 million property owners. This scrutiny will span from the 2018-19 financial year all the way through to 2025-26. The goal is to make sure landlords are declaring their rental income correctly and sticking to capital gains tax (CGT) rules.

The ATO has already found that about 90% of rental property owners made mistakes on their tax returns in previous audits. So, they’re expecting to raise a significant amount of tax revenue from this initiative.

What Does This Mean for You?

If you own any high-value lifestyle assets or investment properties, you could find yourself in the ATO’s sights. The takeaway? Make sure your taxes are up-to-date and that you’re accurately reporting all of your income and assets. It’s always better to get ahead of the ATO’s data-matching programs than to get caught out later!

So, whether you’re the proud owner of a luxury car or a couple of investment properties, now’s the time to double-check your tax filings and ensure everything’s in order.

 Got any questions or need some personalized advice? Feel free to contact us—we’re here to help!