Residential investment property loan data

Residential investment property loan data overview

RIPL data will support the identification, assessment, and treatment of rental property expenses, and capital gains tax risks.

Education and online services

• RIPL data may be available to:  
  • tax professionals through  
    • pre-filling reports in Online services for agents
    • Practitioner Lodgment Service (PLS) through Standard Business Reporting (SBR) enabled software
  • Individual self-preparers through myTax, specifically  
    • rental property schedule interest on loans and/or borrowing expense labels and
    • rental income tax return labels.

Data analytics and insights

We will use insights from the data to design ways to make it easier for taxpayers to interact with the system and get their affairs right.

RIPL data will be compared with claims a taxpayer makes in their rental property schedules and rental tax return labels.

The data will help us execute strategies to:

• identify relevant cases for administrative action including compliance activities and educational strategies  
  • After you lodge a return, if we need to verify a discrepancy, we'll contact you by phone, letter or email
  • Before we take any administrative action, you'll be able to verify the accuracy of the information we hold. You have 28 days to respond before we take administrative action associated with RIPL data use.
• inform rental property owners of their tax obligations as part of an educative campaign including  
  • sending emails or letters
  • social media posts
  • posters and toolkits on our website.
• avoid unnecessary contact with taxpayers who are correctly reporting and claiming rental property income or expenses.

Previous related programs

Each year we conduct a review of a random sample of individual tax returns to estimate the difference between the tax collected and the amount that should have been collected if they were fully compliant with the law.

For the 2019–2020 financial year, we estimate there is net tax gap of 5.6% or $9 billion for individuals not in business. Rental property risks contribute 14% of this net tax gap.

Each year we undertake the property management data-matching program to allow us to identify and address a number of taxation risks in the investment property market.

Data providers

We are the matching agency and, in most cases the sole user of the data obtained during this data-matching program.

We may obtain data from financial institutions and their subsidiaries, including:

• Adelaide Bank
• ANZ
• Bank of Queensland
• Bendigo Bank
• Commonwealth Bank
• Bankwest
• ING
• Macquarie Bank
• National Australia Bank
• Suncorp
• Westpac
• RAMS
• Ubank
• St George
• Bank of South Australia
• Bank of Melbourne
• ME Bank.

Eligibility as a data provider

We adopt a principles-based approach to ensure our selection of data providers is fair and transparent.

Inclusion of a data provider is based on the following principles:

• Provider information allows us to materially increase (or sustain) our visibility over residential investment property loans in the Australian market.
• The cost to acquire data and the cost incurred by the owner or custodian to extract the data, is collectively less than the value the data provides to address program objectives.
• The data owner or its subsidiary operates a business in Australia that is governed by Australian law.
• The data owners provide residential investment property loans to individuals.
• The data owner undertook these activities in the years in focus.
• The data is integrated, centrally located and able to be extracted using database querying techniques.

If the client-base of a data provider does not present a risk, or the administrative or financial cost of collecting the data exceeds the benefit the data may provide, the data owner may be excluded from the program.

The data providers for this program will be reviewed annually against the eligibility principles.

Our formal information gathering powers

To ensure statutory requirements are met, we obtain data under our formal information gathering powers. These are contained in section 353-10 of Schedule 1 to the Taxation Administration Act 1953.

This is a coercive power, and data providers are obligated to provide the information requested.

We will use the data 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 that the use of the information is reasonably necessary for our enforcement-related activities.

Data elements we collect

Data of residential investment property loans held by individuals will be collected from financial institutions. We negotiate with the selected data providers to obtain the data in their systems. The collected data may contain all or a selection of the fields listed below, depending on what fields the data provider holds.

Loan account holder details

• Unique client ID
• First name, middle and surname(s)
• Addresses (residential, postal)
• Australian business number (if applicable)
• Email address
• Contact phone numbers
• Date of birth

Loan account details

• Unique account ID
• Account number
• BSB
• Account name
• Loan type
• Loan commencement date
• Expected loan end date
• Term of the loan
• Opening balance (start of loan)
• Opening balance (start of financial year)
• Closing balance (end of financial year)
• Borrowing expenses

Property details

• Unique property ID
• Property address

Loan account transactions

• Unique account ID
• Transaction date
• Transaction type
• Transaction description
• Transaction amount
• Credit or debit

Number of records

We expect to collect data on approximately 1.7 million individuals each financial year for this program.

Data quality

Sample data has informed our expectation that the data quality will be of a high standard. Financial institutions have sophisticated computer systems, and they have prudential and due diligence obligations to maintain the quality of their records.

Data retention

We collect data under this program for all financial years from 2021–22 to 2025–26. We collect this data annually following the end of each financial year.

Due to the number of data providers, we collect data periodically. We work with the data providers and aim to balance our requests against a data provider's competing business priorities.

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

We will retain each financial year’s data for 7 years from receipt of the final instalment of verified data files from all data providers. We may extend the timeframe for retention of RIPL data, which will be reviewed on a rolling basis at intervals of no longer than 7 years. Each review will determine whether extending the data retention period is required.

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

• The discrepancy matching that occurs under parts of this program is iterative in nature. This includes the data being used to generate lodgment reviews with subsequent lodgments then being compared to the transactional data for accuracy. This process can typically occur over multiple financial years.
• Retaining data for 7 years 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.
• Sale of real estate, such as a rental property, potentially triggers a capital gains event. This can include a main residence that has been rented out for a period. A property may be retained for many years prior to disposal. Retaining the data is necessary to assess capital gains impacts for both rental and lifestyle properties, like holiday homes.
• The data is used in multiple risk models, including models that establish retrospective profiles over multiple years aligned with the period of review.
• The data enables us to conduct long term trend analysis and risk profiling of the accommodation market. Understanding the property lifecycle enables us to provide targeted and timely education, tailored to a taxpayer's individual circumstances.
• The data enhances our ability to identify taxpayers who may not be complying with their tax and super obligations.

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