ATO Tightens Oversight on ‘Lifestyle Assets’ and Investment Properties

For overseas investors, skilled migrants, and business migrants holding high-value assets or investment properties in Australia, this means greater transparency and increased scrutiny in tax reporting, with potential exposure to reassessments, penalties, and even criminal liability for breaches.

Source: Internet

Expanded Oversight to Cover High-Value Lifestyle Assets

The ATO will obtain and cross-check insurance policy data for six categories of assets held between the 2023–24 and 2025–26 financial years, including:

• Private aircraft valued at over A$150,000
• Vessels (boats/yachts) valued at over A$100,000
• Artwork valued at over A$100,000
• Thoroughbred horses insured for more than A$65,000
• Luxury motor vehicles valued at over A$65,000

Policy data will include the owner’s name, contact details, financial information, premium amounts, and asset descriptions. The ATO will review this information against obligations for income tax, superannuation, capital gains tax (CGT), goods and services tax (GST), and fringe benefits tax (FBT).

Importantly, the ATO will focus on cases where businesses acquire high-value assets for personal use by partners or employees, as this may trigger FBT liabilities.

Closer Scrutiny of Investment Property Owners

The compliance push also targets investment property owners, with particular attention to:

• Accuracy of declared rental income
• Correct calculation of CGT on sales
• Improper claims for tax concessions on properties left vacant
• Overstated interest deductions
• Non-disclosure of rental properties

Lawyer’s Perspective – Key Compliance Signals

For migrants and overseas investors with Australian assets, this initiative sends three clear messages:

• Broader Data Sources – The ATO is integrating information from insurers, banks, property managers, and other third-party providers to cross-check tax declarations.
• Cross-Tax Coordination – Reviews may cover income tax, CGT, FBT, and more, with one irregularity potentially triggering wider audits.
• No Exemptions for Non-Residents – Asset ownership in Australia, regardless of visa status or residence, may be subject to these data-matching programs.

Recommendations:

• Arrange regular reviews of asset declarations and tax records with a qualified tax professional
• Maintain complete records for asset purchases, insurance, rentals, and disposals
• Ensure asset and tax records are consistent in visa applications or renewals to avoid impacting the Character Test or Genuine Intention assessments
• For business-owned assets, clearly separate corporate and personal use to avoid unexpected FBT liabilities

With the expansion of the ATO’s data-matching programs, Australian asset holders are entering a high-transparency, zero-tolerance environment for non-compliance. For migrants and overseas investors, compliance is not just about minimising tax risk – it may also influence long-term residency and citizenship plans.

If you have any questions or would like professional assistance, please feel free to contact us at Riverwood Migration (Email: [email protected]). We are committed to providing transparent, expert migration services to help you achieve your dream of moving to Australia.