Rental bond – 20 September 1985 to 2022–23 financial years

The Australian Taxation Office (ATO) has conducted the rental bond data-matching program since 2005. We intend continuing this data-matching program for another three years. Rental bond data was originally collected with property transfer data for the real property transaction data-matching program.

Following the 2013–14 federal Budget announcements, reporting of property transfer data to the ATO became mandatory from 1 July 2016 with the enactment of the Tax and Superannuation Laws amendment (2015 Measures No 5) Bill 2015.

The real property transactions data-matching program has been amended to support the property transfer data. The rental bond data-matching program is detailed in this protocol.

Owners of property that produces income have income tax reporting obligations. We use real property rental bond data from state and territory rental bond regulators to identify properties that produce income.

Our data-matching programs follow the Office of the Australian Information Commissioner’s (OAIC) Guidelines on data matching in Australian Government administration (2014). The guidelines assist Australian Government agencies to use data-matching as an administrative tool in a way that complies with the Australian Privacy Principles (APPs) and the Privacy Act 1988 (Privacy Act) and are consistent with best privacy practice.

The ATO has responsibility to protect public revenue and maintain community confidence in the integrity of the tax system.

Our data-matching programs assist us to undertake these responsibilities.

Find out about:

• Why we look at rental bond data
• Program objectives
• How we use the data
• Public notification of the program
• Our lawful role
• How we undertake data-matching
• Why we undertake data-matching

Why we look at rental bond data

The rental bond data-matching program allows us to identify and address taxation risks including:

• income tax – taxpayers owning income producing property have obligations to report the income generated in their tax returns
• capital gains tax (CGT) – taxpayers disposing of a property may trigger a CGT event. When the property has been used to produce income, this can affect how the CGT event is treated
  • CGT obligations commenced in September 1985, historical rental bond data may be used to support CGT cost base calculations
  • this does not change our general compliance approach of reviewing an assessment within the standard period of review, which also aligns with the requirements for taxpayers to keep their records.
   

Program objectives

The objectives of this data-matching program are to:

• promote voluntary compliance by communicating how we use external data with our own to help ensure taxpayers comply with their tax and superannuation obligations
• increase community confidence in the integrity of the tax and superannuation systems and other programs administered by the ATO
• identify property producing income and detect compliance risks and trends
• work with real property intermediaries to obtain an understanding of risks and issues as well as trends of non-compliance
• identify individuals who may be failing to meet their lodgment, correct reporting and/or payment obligations then educate and assist them to comply
• support compliance strategies to minimise future risks to revenue
• help ensure taxpayers are fulfilling their tax and superannuation reporting obligations.

How we use the data

Rental bond data collected under this program will be compared with information included in tax returns.

The ATO compares this data against our records and other data we hold. This helps us identify taxpayers owning an income producing property who may not be meeting their reporting, lodgment and/or payment obligations.

The program will support client engagement and voluntary compliance through education programs.

Our previous related programs

This is a continuing data-matching program. During the 2018–19 financial year this program, in combination with other data matching and compliance strategies, identified over 12,000 cases where real property dealings had not been treated correctly and raised an additional $51 million in revenue. This demonstrates the effectiveness of these approaches in protecting public revenue.

Data providers

The ATO is the matching agency and the sole user of the data obtained in the course of this data-matching program.

Data will be obtained from the following:

• New South Wales Fair Trading – Professional Standards and Bonds
• Department of Justice and Community Safety – Consumer Affairs, Victoria
• Residential Tenancies Bond Authority – Consumer and Business Services, South Australia
• Bond Administrator – Department of Mines, Industry Regulation and Safety, Western Australia
• ACT Office of Rental Bonds – Access Canberra
• Department of Justice – Office of the Residential Tenancy Commission, Tasmania
• Residential Tenancies Authority, Queensland.

Our formal information gathering powers

The data will be obtained under our formal information gathering powers contained in section 353–10 of Schedule 1 to the Taxation Administration Act 1953.

This is a coercive power that obligates the data providers to provide the information requested. We will use the information for tax and superannuation compliance purposes.

Privacy Act

Data will only be used within the limits prescribed by Australian Privacy Principle 6 (APP6) contained in Schedule 1 of the Privacy Act and in particular:

• APP6.2(b) – the use of the information is required or authorised by an Australian law
• APP6.2(e) – the ATO reasonably believes the use of the information is necessary for our enforcement-related activities.

Keeping data safe

The data-matching program will be conducted on our secure systems that comply with the requirements of:

• the Australian Government Information Security ManualExternal Link produced by the Australian Signals Directorate, which governs the security of government information and communication technology (ICT) systems
• the Australian Government Protective Security Policy FrameworkExternal Link which provides guidance on security governance, personnel security, physical security and information security.

All ATO computer systems are strictly controlled according to Australian Government security standards for government ICT systems, with features including:

• system access controls and security groupings
• login identification codes and password protection
• full audit trails of data files and system accesses.

We will use our secure internet-based data transfer facility to transfer the data from source entities.

Data elements collected

Data will be collected bi-annually through to 30 June 2023.

We negotiate with the selected data providers individually to obtain data held within their systems. The collected data may contain all or a selection of the fields listed below.

Landlord identification details – individuals

• Given and surnames (if more than one name on the policy)
• Addresses (residential, postal, other)
• Email address
• Phone number
• Unique identifier for the landlord.

Managing agent identification details

• Business name
• Addresses (business, postal, registered, other)
• Contact name
• Contact phone number
• Email address
• Unique identifier of the managing agent.

Rental bond details

• Rental property address
• Period of lease
• Commencement of lease
• Expiration of lease
• Amount of rental bond held
• Number of weeks the rental bond is for
• Amount of rent payable for each period
• Period of rental payments (weekly, fortnightly, monthly)
• Type of dwelling
• Number of bedrooms
• Unique identifier of the rental property.

Number of records

The number of individuals affected by this data collection is expected to be approximately 350,000 each financial year.

Data quality

We anticipate the data quality will continue to be of a high standard. State and territory rental bond regulators use sophisticated computer systems to administer state and territory tenancy laws.

Being responsible for receipt, management and return of residential tenancy rental bonds state and territory rental bond regulators have due diligence obligations to maintain records of a high quality.

The data is sourced from the data providers' systems and may not be available in a format that can be readily processed by our systems. We apply extra levels of scrutiny and analytics to verify the quality of the data.

This includes but is not limited to:

• meeting with data providers to understand their data holdings, including their data use, data currency, formats, compatibility and natural systems
• sampling data to ensure it is fit for purpose before fully engaging providers on task
• verification practices at receipt of data to check against confirming documentation; we then use algorithms and other analytical methods to refine the data.

Data is transformed into a standardised format and validated to ensure it contains the required data elements prior to loading to our computer systems. We undertake program evaluations to measure effectiveness before determining whether to continue to collect future years of the data or to discontinue the program.

To assure data is fit for consumption and maintains integrity throughout the data-matching program, it is assessed against the 11 elements of the ATO data-quality framework:

• accuracy – the data correctly represents the actual value
• completeness – all expected data in a data set is present
• consistency – data values are consistent with values within the data set
• currency – how recent the time period is that the data set covers
• precision – the level of detail of a data element
• privacy – access control and usage monitoring
• reasonableness – reasonable data is within the bounds of common sense or specific operational context
• referential integrity – when all intended references within a data set is valid
• timeliness – how quickly the data is available for use from the time of collection
• uniqueness – if duplicated files or records are in the data set
• validity – data values are presented in the correct format and fall within predefined values.

Data retention

The data collection is twice-yearly after 30 June and 30 January each year, through to 30 June 2023.

Due to the number of data providers and to ensure currency of the data, we collect data periodically. We work co-operatively with the data providers and aim to balance our requests against peaks and troughs of demand in a data provider's own business.

In 2019 the ATO was granted a five-year exemption by the Australian Information Commissioner and Privacy Commissioner to depart from the data destruction requirements of the National Archives of Australia's General Disposal Authority 24 (GDA24) – Records relating to data matching exercises. GDA24 has since been revoked.

We destroy data that is no longer required, in accordance with the Archives Act 1983, the records authorities issued by the National Archives of Australia, both general and ATO-specific.

We will retain the data for seven years from receipt of the final instalment of verified data files from the data providers. We intend to undertake a review by the seven-year anniversary to determine whether the data is still required.

The data is required for this period for the protection of public revenue as:

• taxpayers owning property producing income have income tax reporting obligations
• when an income producing property is subsequently sold it impacts CGT assessment
• property is often held for many years before being transferred or sold, which then triggers CGT event. To identify rental impacts for CGT liability assessment real property rental bond history dating back to 20 September 1985 (the introduction of the CGT regime) is required
• the data enhances our ability to identify taxpayers who may not be complying with their tax and superannuation obligations, which is integral to the protecting the integrity of the tax and superannuation systems
• retaining data supports our general compliance approach of reviewing an assessment within the standard period of review, which also aligns with the requirements for taxpayers to keep their records
• the data is also used in risk models, including models that establish retrospective profiles over multiple years aligned with period of review.

This program will be subject to an evaluation within three years which is consistent with the requirements of Guideline 9.

While increased data-retention periods may increase the risk to privacy, we have a range of safeguards to appropriately manage and minimise this. ATO systems and controls are designed to ensure the privacy and security of the data we manage.

See also:

• Our lawful role
• How we undertake data-matching
• Why we undertake data-matching

Public notification of the program

We will notify the public of our intention to collect data through to 30 June 2023 by:

• publishing a notice in the Federal Register of Legislation gazettes in the week commencing 17 May 2021
• publishing this data-matching program protocol on our website at ato.gov.au/dmprotocols
• advising the data providers, they
  • can notify their clients of their participation in this program
  • should update their privacy policies to note that personal information is disclosed to the ATO for data-matching purposes.
   

Gazette notice content

The following information about the data-matching program appears as a gazette notice in the Federal Register of Legislation.