Receiving your letter
You may receive a letter to verify the rental deductions claimed in your tax return if the expenses reported appear to be outside the average individual claim ranges for borrowing and/or legal expenses.
The letter will include a schedule showing the amounts you claimed and the proposed adjusted amounts.
Conveyancing expenses incurred on the purchase and sale of your property are not deductible. Instead, these form part of the cost base for capital gains tax purposes.
Borrowing expenses of more than $100 has to be spread over five years, or over the term of the loan, whichever is less.
What you need to do
You need to review the capital gains schedule and compare the information with your records. You can then determine if you agree or disagree.
If you have a question about your data-matching letter, phone us on 1300 768 912, and select option 3 between 8:00 am and 6:00 pm, Monday to Friday.
Quote the reference number from your letter when you contact us. You can find it at the top right of your letter.
Below is a sample of the rental expenses schedule on the letter. Keep in mind that your letter will contain your own details and may not look exactly like this. The definitions will help explain your schedule.
Sample: rental expenses schedule
Income year |
Original tax return item |
Amount you claimed ($) |
Adjusted amount ($) |
|---|---|---|---|
2022 |
21U – Other rental deductions |
$50,115 |
$36,215 |
Definitions to understand your schedule
The following definitions will help you understand your schedule:
- Borrowing expenses – expenses directly incurred in taking out a loan for the property (for example, loan establishment fees, title search fees, and costs for preparing and filing mortgage documents).
- Legal expenses – expenses incurred in relation to the production of rental income, but not those relating to the purchase and sale of the property or other capital expenses.
For more information, see Rental expenses to claim.
If you agree
If you agree with the information provided in the letter, you don't have to contact us or take action. We will change your tax return to include the information provided. We will send you an amended notice of assessment after 28 days.
If you realise that, in addition to the amounts we have shown, you have omitted income from other sources or from the same source in other income years, you should give us the details so we can include it in your amended assessments.
We continually check for missing, inaccurate or incomplete information on tax returns.
Once you receive your amended notice of assessment, you'll need to pay any amounts you owe us by the due date.
If you disagree
If you disagree with the information provided, you will need to respond to us within the timeframe in your letter. You must also provide supporting documents that show how the amounts are incorrect.
To let us know that you disagree with the information provided, you can send us your details:
- mail to
Australian Taxation Office
PO Box 3543
ALBURY NSW 2640 - email to
datamatchingteam@ato.gov.auOpens in a new window
Be aware, the internet is not a secure environment. We do not control the path of inbound and outbound emails. If you choose to communicate with us by email the privacy of your personal information can't be guaranteed.
Your response will be assessed and once finalised you will receive an amended notice of assessment. You may be contacted by the case officer reviewing your supporting documents if we require additional information.
If we don't receive a response from you within 28 days, we will automatically amend your tax return with the information we have. You will then receive an amended assessment.
Supporting documentation
If you disagree with information contained in the letter from us about your rental expenses, we may ask you to provide the following types of supporting documents.
Type of expense |
Supporting documents |
|---|---|
Legal expenses |
|
Borrowing expenses |
|