HomeGround Real Estate Landlord ATO Talking Points 2016
The following information is designed to assist property managers provide a quick and easy response to landlords enquiring about the ATO ruling for HomeGround Real Estate:
What is the ATO ruling?
The Australian Tax Office has made a class ruling (which means it is a legal ruling that applies to HomeGround Real Estate only) that allows landlords who list their property with us at a discounted rental rate (eg less than market rent) to claim the gap as a tax deduction at the end of financial year.
How does it work?
At the end of financial year we (HomeGround Real Estate) will provide you with all of the documents you need to do your tax return – including a tax deductable donation receipt for the amount of rent you have deducted to provide a more affordable property to a tenant or tenants. For example your property is worth $550 at market rent and you decide you only need $450 in rent and want to offer the property to a family in need. We will provide you with a donation receipt for $5200 (made up of the $100 per week in rent you have foregone) from Launch Housing (our parent organisation).
How does it benefit me?
The tax ruling is not designed as a financial incentive but it does recognise your contribution by allowing you to legitimately claim the gap between market rent and any discount you decide you can offer.
The main benefit is in the form of a social contribution simply by listing with HomeGround Real Estate. We are a social enterprise with Launch Housing – Launch Housing is one of Melbourne’s largest providers of services to people experiencing or at risk of homelessness. Even if you need a market return on your property – if you list it with us the management fees go into supporting the work of Launch Housing towards ending homelessness in Melbourne.
- A discount of just 10% off the market rent can make housing affordable for thousands of Victorians who are otherwise priced out of the market and at risk of homelessness.
- Please contact your financial adviser or tax accountant for more detailed advice on how this ruling might apply to you and your financial situation. Here is a link to the ATO ruling online that your accountant/adviser can refer to https://www.ato.gov.au/law/view/pdf/pbr/cr2016-042.pdf