Opening address
Members were reminded of the importance of being familiar with, and adhering to, the classifications for agenda items and meetings.
Industry insights
An industry insights overview using intelligence from recent media, and indicators from the property and construction industry was presented. Focus areas included:
- key media themes
- public advice and guidance and litigation updates
- debt overview
- build-to-rent
- recent court decisions.
Members discussed each topic, with a focus on key media themes and housing trends in the broader economic environment.
Property Council of Australia
The September 2025 Procore Property Council Industry Sentiment Survey shows national confidence holding steady at 124 index points, with South Australia leading sentiment and Victoria and the Australian Capital Territory lagging.
Staffing levels and debt finance availability are expected to rise, while interest rates are anticipated to fall over the next 12 months.
Residential and industrial property sectors show strong capital growth expectations, while office and retail outlooks are mixed, particularly in Victoria and the Australian Capital Territory which trend negatively.
Respondents remain critical of the Federal Government’s performance, with housing supply and affordability still the top concern, followed by tax reform and economic management.
Sentiment toward state governments is mixed, with positive views recorded in Queensland, Western Australia, and South Australia, while Victoria and the Australian Capital Territory continue to attract strongly negative sentiment. At the state level, property taxes and charges have overtaken housing as the most pressing issue for industry stakeholders.
Members provided insights on the range of housing, significant projects and announced infrastructure investment and the limitations of available workforce, materials and housing required to deliver.
Thin capitalisation
Members were provided a general update on thin capitalisation and were given the opportunity to raise any practical implementation challenges they may be experiencing. Members recommended the Australian Taxation Office (ATO) consider further awareness and education on Division 7A (in the context of thin capitalisation). We will consider opportunities to raise further awareness.
ATO Brisbane 2032 games engagement strategy
Creating a level playing field – The ATO is committed to ensuring all business and taxpayers involved in the Brisbane games meet their tax obligations so that complying businesses/taxpayers are not disadvantaged.
Proactive engagement – We are engaging early with industry, government, and community stakeholders to provide guidance, education, and support well before the games commence.
Collaboration and partnerships – We are working closely with phoenix taskforce members, regulators, industry and advisory bodies to share intelligence, coordinate compliance activities, and strengthen collective outcomes.
Targeting high-risk behaviours – We are focused on identifying and addressing risks such as phoenix activity, shadow economy behaviours and non-compliance in sectors most affected.
Supporting change – Aim to support the industry’s commitment to do better. Phoenixing behaviour undermines the financial viability and may use worker exploitation to further personal financial gain.
Members discussed how this forum and the industry can remain engaged on this engagement strategy. ATO confirmed further updates will be provided going forward.
Investment financing insights
External members discussed their top 3 issues around financing and investment in the property and construction industry which provided an understanding of the breadth of topical issues including:
- build-to-rent
- foreign capital and equity
- foreign investment
- state taxes
- private credit
- approval delays
- Division 974, debt/equity
- 128F capital raisings.
Private capital – related programs of work/focus areas
Australia’s private capital market continues to grow and the ATO are seeing private capital invested across a range of asset classes and industries. In response to this growth, and the features and tax issues associated with this sector, the ATO has implemented various strategies focusing on private capital.
ATO strategies include:
- private equity
- foreign funds (foreign pension funds and sovereign wealth funds)
- collective investment vehicles (managed investment trusts, attribution managed investment trusts and corporate collective investment vehicles)
- infrastructure and business fragmentation.
Collectively, these strategies comprise the Private Capital Program led by the ATO’s Public Groups business area.
Our overall strategy for private equity extends to include the Private Wealth business area. Private Wealth focus on domestic private equity firms, while Public Groups focus on international firms. Both business areas consider the associated participants. They work closely but do ensure the approach to private equity is tailored for domestic and international firms, and their participants as required.
The private equity strategy takes a holistic approach to the identification and treatment of tax risks. It considers:
- all participants in the industry, including firms, funds, investors and targets
- tax risks across all stages of the investment lifecycle, pre-acquisition, acquisition, holding, pre-exit and exit.
The potential tax risks for participants involved in private equity are broad and will vary based on the activities of the participant and the stage of the investment lifecycle. The ATO continue to examine and review arrangements flagged to market through published guidance, including Taxation Determinations:
- TD 2010/20 Income tax: treaty shopping – can Part IVA of the Income Tax Assessment Act 1936 apply to arrangements designed to alter the intended effect of Australia's International Tax Agreements network?
- TD 2010/21 Income tax: can the profit on the sale of shares in a company group acquired in a leveraged buyout be included in the assessable income of the vendor under subsection 6-5(3) of the Income Tax Assessment Act 1997?
- TD 2011/24 Income tax: is an 'Australian source' in subsection 6-5(3) of the Income Tax Assessment Act 1997 dependent solely on where purchase and sale contracts are executed in respect of the sale of shares in an Australian corporate group acquired in a leveraged buyout by a private equity fund?
- TD 2011/25 Income tax: does the business profits article (Article 7) of Australia's tax treaties apply to Australian sourced business profits of a foreign limited partnership (LP) where the LP is treated as fiscally transparent in a country with which Australia has entered into a tax treaty (tax treaty country) and the partners in the LP are residents of that tax treaty country?
As issues are identified in cases, there will be further consideration around the need for additional public advice and guidance.
Australian Securities and Investments Commission
The upward trajectory of external administration appointments (EXADs) persisted in the 2024–25 financial year, with 14,722 companies entering external administration, 39% increase from the 11,053 companies recorded in 2023–24. In the first quarter of the 2025–26 financial year, 3,556 companies entered external administration, representing a slight decrease of 2.1% compared to the same period in 2024–25, 3,633 companies.
During the first 3 months of the 2025–26 financial year, the industry's most frequently experiencing appointments were:
- Construction, 24%
- accommodation and food services, 16%
- other/non-described services, 11%
- professional, scientific and technical services, 7%
- retail trade, 6%.
As at 30 September 2025, there were 3,619,913 registered companies. The proportion of companies entering external administration in the 12 months to 30 September 2025 was 0.40%, an increase from 0.36% in the prior year, though this remains well below historical peaks observed in 2011–12 and 2012–13 (0.56% and 0.53%, respectively).
Small business restructuring appointments accounted for approximately 22% of all first-time appointments at their peak in late 2024. Since that time, these appointments have declined, representing about 13% of appointments in the quarter ending 30 September 2025, while creditor-driven appointments, including court appointments, have seen a corresponding increase.
Australian Securities and Investments Commission (ASIC) statistics, derived from reports lodged by registered liquidators, indicate that EXADs within the construction industry are not dissimilar to all EXADs:
- approximately 80% held estimated assets of $100,000 or less and liabilities between $1,000,001 and $5 million
- over 75% involved fewer than 25 creditors
- in roughly 50% of cases, unsecured creditors collectively were owed less than $250,000
- more than 80% did not pay a dividend to unsecured creditors.
More information about ASICs Insolvency StatisticsExternal Link is available.
Frontline compliance
The ATO provided an update on:
- how we support businesses to meet obligations
- how we are strengthening our approach to payment, including debt recovery actions taken across the taxpayer population in 2024–25
- our role in small business restructures.
Members discussed the firmer action approaches and expressed interest in further updates on this. The ATO confirmed we will return for further updates, in the future.
Marketing and communications project
The ATO facilitated a discussion about the suitability of a draft communication approach for helping subcontractors in the property and construction industry to improve engagement with the ATO and their tax obligations.
Feedback was sought on the overall approach being proposed as well as some of the communication channel options available, including partnering with the members for use of their channels and networks.
The ATO and members discussed how the approach will be designed and implemented, and where user testing support of draft communication products can occur so that the final products best meet audience needs. Further consultation will continue.
Attendees
|
Organisation |
Attendee |
|---|---|
|
ATO |
Amy James-Velagic (Co-chair), Private Wealth |
|
ATO |
Anthony Marvello, Small Business |
|
ATO |
Marielle Delgado, Frontline Compliance |
|
Arcem Advisory |
Phil Shepherd |
|
Australian Constructors Association |
Meg Redwin |
|
Australian Securities and Investments Commission |
Carl Sibilia |
|
BDO |
Marcus Leonard |
|
Chartered Accountants Australia and New Zealand |
Karen Liew |
|
Frasers Property Australia |
Andrew Compton (Co-chair) |
|
Housing Industry Association |
Stuart Collins |
|
KPMG |
Anna Chong |
|
Pitcher Partners |
Simon Chun |
|
Property Council of Australia |
Kathy Zhang |
|
RSM |
Adam Crowley |
|
The Tax Institute |
Simon Clark |
|
Urban Development Institute of Australia |
Andrew Mihno |
Guest attendees
|
Organisation |
Attendee |
|---|---|
|
ATO |
Aaron Bennett, Private Wealth |
|
ATO |
Andrew Fenn, Private Wealth |
|
ATO |
Daniel Carter, Private Wealth |
|
ATO |
Jarred Needham, Private Wealth |
|
ATO |
Jenny Lin, Private Wealth |
|
ATO |
Kacey Jardine, Private Wealth |
|
ATO |
Karen Price, Private Wealth |
|
ATO |
Kasey Macfarlane, Private Wealth |
|
ATO |
Melinda Colebrook, ATO Corporate |
|
ATO |
Sally McNamara, Private Wealth |
Apologies
|
Organisation |
Member |
|---|---|
|
ATO |
Louise Clarke, Private Wealth |
|
ATO |
Nadia Alfonsi, Private Wealth |
|
Alvarez & Marsal Australia and New Zealand |
Matthew Evans |
|
Housing Industry Association |
Alessandra Schladetsch |
|
Master Builders Australia |
Shane Garrett |
|
Queensland Building and Construction Commission |
Natasha Dennis-Weller |
|
Revenue NSW |
David Allan |