Landlords are more likely to claim a loss on their investments than a profit.

The number of Aussie landlords making a loss on their investments and claiming negative gearing tax benefits has nearly doubled over the past decade, Australian Taxation Office data reveals.

The research showed a record 1.3 million landlords negatively geared their investments in 2017 compared to 631,000 in 2000.

Landlords who made a loss and claimed negative gearing in 2017 – the most recent year data was available -also outnumbered those who broke even or made a profit off their investments by nearly two to one.

Only 856,000 property investors broke even or made a profit in the latest figures, up from 532,000 in 2000.

The ATO figures further painted a picture of a rental market where more properties were becoming concentrated in the hands of only a few investors.

These landlords tended to make sizeable losses off their investments each year and were heavily reliant on negative gearing.

The number who had six or more properties and a taxable income under $18,200 – the threshold that attracted no income tax in FY2017 – surged from 1246 to 3008 over the 17 years, peaking at 3981 in 2008.

Landlords have also been getting older. Only 15 per cent of investors were over 60 at the start of the century, compared to 23.5 per cent in the most recent figures.

Those between 40 and 59 made up 53.7 per cent of the current market, while 21.8 per cent were in their thirties and just 5.8 per cent were under 30.

More than 2 million taxpayers claim property deductions.

The exorbitant costs of negative gearing appear to be sounding alarm bells within the halls of the ATO.

Tax commissioner Chris Jordan last month said almost nine out of 10 tax returns related to property investment contained “errors”.

These included deductions for capital works and repairs at times when the properties were not available for rent.

With 2.1 million taxpayers claiming $47.4 billion in property deductions against $44.1bn in rental income, “you can get a sense of the potential revenue at risk”, he said

Daily Telegraph/17 APR 2019

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