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