# how the government find out people who did not declare their rental income



## peter111 (Jun 7, 2015)

in the areas close to universities, people rent houses to students,
many of them do not declare their rental income.


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## Mish (Jan 13, 2013)

How do you know they do not declare their rental income?

Most people that rent houses out declare their rental income because if they don't then they can't claim they deductions ie. Bank interest etc.

If you are talking single room in a house unfortunately I believe alot don't declare them


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## JandE (Jul 17, 2015)

Most times the Tax Office get told by people who are jealous, or by unhappy tenants.

The owners who avoid telling the Tax Office don't worry about tax deductions, because once they do declare, they then become liable to Capital gains tax when they sell, and that could cost them nearly half the profit they make. And part of those tax deductions (Negative Gearing) they had made, would be added back to the profit and taxed on the sale.


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## soontowed (Mar 20, 2014)

Yes we paid capital gain tax when we sold one of our house, My hubby is buying old houses for less price, then they demolish the whole house


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## LizBee (Jul 18, 2013)

peter111 said:


> in the areas close to universities, people rent houses to students,
> many of them do not declare their rental income.


I don't understand why you are making this is your problem?


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## JandE (Jul 17, 2015)

LizBee said:


> I don't understand why you are making this is your problem?


Many people like to report people who don't declare taxable income, as they are actually stealing from the other taxpayers.

If someone manages to avoid say $10,000 in tax, then the rest of the taxpayers effectively have to pay extra, to cover the shortfall.

That why some do like to make it their problem, and not ignore it. Those people are stealing from us.

The funny thing is when the tenant claims the rent assistance from Centrelink, and then a few years later, when the ATO do the cross checks with Centrelink, and find the tax avoidance, the home owner gets heavy penalties on top of the unpaid tax bill for those years.


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