Property and Construction Stakeholder Relationship Forum key messages 17 March 2026

Opening address

Members were welcomed and reminded of the importance of being familiar with, and adhering to, the classifications of forum agenda items. Issues discussed included:

the importance of recording-keeping and governance, with a highlight on the recent outcome of Commissioner of Taxation v S.N.A Group Pty Ltd [2026] as an example.
the recent release of TA 2026/1 Contrived property development arrangements between related parties that defer recognition of income and exploit tax losses and the expected draft practical compliance guidelines for long term construction contracts.
the meeting theme of ‘Contemporary living in Australia’ and the focus on the changing housing landscape in Australia, including new and emerging housing trends and the associated tax implications.

Industry insights

The Australian Taxation Office (ATO) presented an industry insights overview using intelligence from recent media, and indicators from the property and construction industry. Focus areas included key media themes, Public Advice and Guidance (PAG) and litigation updates, debt overview and communications project.

Key media themes

Observations that residential building numbers and rental affordability continue to dominate the media coverage, impacted by labour and material shortages and less economic investment.

PAG and litigation updates

Recent PAG and litigation updates that are relevant to the property and construction industry was presented.

ATO collectable debt

A collectable snapshot as at 31 December 2025 was provided.

ATO communication project

An update was presented on the tradies web content communications project which is scheduled to go live in April 2026.

Member insights

Members presented key industry insights from their respective organisations.

Master Builders Australia key messages included:

economic backdrop has worsened over last 6 months
projection of a 204,000 home deficit relative to the Housing Accord target
public sector projects likely to support uplift in non-residential building
strong prospects for engineering construction due to utilities and resources work.

Property Council of Australia discussed the results from Property Council of Australia’s December 2025 Sentiment survey highlighting:

Australia's national and state economies
property asset class performance
forward work expectations
interest rate forecasts
debt finance availability.

Australian Securities and Investments Commission (ASIC) preliminary data shows just over 9,300 insolvency appointments as at 16 March 2026, broadly consistent with the same period last year.

Since the quarter ending June 2024, the number of appointments has remained relatively steady between 3,300 to 3,900 a quarter, 1,100 to 1,300 a month.

So far in 2025–26 the industries most frequently experiencing appointments are:

construction 2,101 (24%)
accommodation and food services 1,292 (15%)
other services 884 (10%)
retail trade 636 (7%)
professional, scientific and technical services 603 (7%)
transport, postal and warehousing 488 (6%). This is the first time this industry has been in the top 6 since ASIC began reporting appointments by industry.

As at the end of February 2026 there were 3.694 million registered companies. The ratio of companies entering external administration in the 12 months to the end of February 2026 compared to the number registered (0.32 %) is well below the prior peaks in the 2011–12 and 2012–13 financial years of 0.56% and 0.53%, respectively.

At its peak late last year, small business restructuring appointments accounted for around 22% of all first-time appointments. Since late last year, there has been a decrease in small business restructuring appointments, with these accounting for 13% of appointments in the first half of 2025–26. At the same time, ASIC have observed an increase in creditor-driven appointments, particularly court appointments.

ASIC statistics, derived from reports lodged by registered liquidators, indicate that insolvency appointments within the construction industry are not dissimilar to all appointments:

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 ASIC insolvency statisticsExternal Link is available.

Employer obligations – compliance property and construction industry

Payday Super – what’s changing from 1 July 2026

From 1 July 2026, the way employers must pay superannuation is changing. Under Payday Super, employers will be required to make super contributions for eligible employees every payday, and in most cases the contribution must be received by the employee’s super fund within 7 days of that payday.

Most employees will be covered by Payday Super, including independent contractors who are deemed employees for super guarantee (SG) purposes.

Key changes to how super is calculated and reported.

Introduction of Qualifying Earnings (QE)

From 1 July 2026, the SG will be calculated as 12% of QE. QE is a new term that includes:

ordinary time earnings
salary sacrifice contributions
certain payments made to workers covered under the extended definition of employees, for example, contractors paid mainly for their labour.

For most employers, QE will not change the overall amount of super they pay, but it provides a more consistent definition for SG obligations.

Improvements to SuperStream

Upgrades are being made to SuperStream, the system used to send superannuation payments and data between employers and super funds. These improvements will help employers meet their SG obligations and avoid penalties by:

reducing the likelihood that employee contributions are rejected by a super fund
providing clearer error messages when contributions are rejected
enabling faster processing of contributions
allowing employers to find out sooner when key super fund details have changed.

Employers should begin preparing for these changes now by:

Reviewing business processes, governance arrangements, and cashflow to ensure a smooth transition, and seeking advice from a tax professional about how these changes may affect your business.
Checking your payroll software to confirm it can support more frequent super contributions. Most systems already can, and your provider will let you know when any updates are available.
Updating and validating employee super fund details. If you are receiving errors or contribution rejections, take steps to correct these records as soon as possible.
Considering alternative payment solutions if you are currently using the Small Business Superannuation Clearing House, to ensure your chosen method aligns with your business needs under Payday Super.
Ensuring your Australian business number is consistent across both SuperStream and Single Touch Payroll to avoid processing issues.

Fringe benefits tax (FBT) findings in the construction industry 2025 FBT year

The ATO provided additional information from the focus areas discussed at the 10 October 2024 forum around subcontractor compliance. This included discussion about the Head Contractor Dashboard and how contractors who receive can better understand their subcontractor population.

In the 2025 FBT year, around 17,000 construction industry employers lodged FBT returns, with 67% coming from small businesses. The most commonly reported benefits were car fringe benefits, expense payments, residual benefits, and meal entertainment.

Common issues identified included:

lodging nil returns or non lodgment notices without checking if benefits exist or accurately valuing them
incorrectly reporting employee contributions, resulting in mismatches
poor record keeping and insufficient documentation to support calculations, exemptions, or concessions
motor vehicle errors, such as claiming 100% business use without evidence, misapplying exemptions, or using invalid logbooks
claiming exemptions for electric vehicles above the luxury car tax threshold or for plug in hybrid electric vehicles acquired under new commitments after 1 April 2025.

Private use of vehicles, including dual cab utes and other commercial vehicles, remains a key focus area.

We continue to work closely with tax agents to strengthen their FBT knowledge and support better compliance among construction industry employers.

Top 3 issues within the industry

External members discussed their top 3 issues and trends relating to the forum theme, Contemporary living in Australia, providing insight into the key challenges and emerging issues affecting the property and construction industry, including:

tax technical
engagement with the ATO
regulation
economic
commercial.

Contemporary living in Australia

The ATO provided an overview of an intelligence scan on Contemporary living in Australia using intelligence from various external and internal sources.

Various areas of the ATO including Private Wealth, Public Groups and Small Business then discussed how the changing ways of living effects new and emerging risks and connects to their Property & Construction risk focus areas.

The ATO and members participated in discussions including what are the impacts from an industry perspective.

Residential rental properties

The ATO provided an overview of the rentals risk, managed by Individuals, Risk and Strategy, which relates to landlords failing to declare or misreporting rental income, and misreporting or overclaiming rental deductions.

There are approximately 2.3 million individuals with an investment property. The latest tax gap estimated for individuals not in business is $12.5 billion. Rentals is a prominent risk, with the rental component estimated to be $1.5 billion. In the Random Enquiry Program for 2023, 94% of rental cases had at least one adjustment. There was insignificant variance comparing agent-prepared lodgment with those self-prepared.

Our observations indicate that the most common reasons for adjustments to rental items on a tax return are:

no or incorrect apportionment of the loan interest costs where the loan was re-financed for private purposes
confusion between capital works and capital allowance claims
lack of substantiation for deduction claims.

The ATO is focussed on reducing the tax gap by using third-party data to sustainably improve tax performance. For example, our special purpose acquisition data program collects data from a range of sources including banks, property managers, insurance companies and bond authorities. By embedding data-driven models and enhancing the lodgment experience through assisted compliance, we aim to reduce errors and administrative burden for taxpayers.

Lifestyle and retirement villages

The current area of focus on retirement villages includes the emerging land-lease segment, which presents a range of different goods and services tax (GST) issues to traditional forms of retirement living.

In addition to compliance-focussed activity, the program of work being undertaken is seeking to understand more about contemporary trends in senior living as a means of early identification of emergent GST issues and risks.

The changes to the GST Act consequent on the commencement of the Aged Care Act 2024 are expected to result in a range of updates to GST PAG.

Frontline compliance – firmer action debt strategy

An update on the ATO payment strategy, including the objective and principles, debt client segments and the ATO's priority segments was provided.

ATO Brisbane 2032 games engagement strategy

The ATO is actively progressing the Brisbane Games project including:

Collaboration across the ATO and with external partners is focused on forming strong working partnerships and leveraging the Phoenix Taskforce early, before taking compliance action.
The ATO Phoenix Program and Phoenix Taskforce are driving a Prevention before Correction strategy, leveraging the Brisbane Games as a key initiative to strengthen operational and compliance capability.
The ATO Phoenix Program continues to work with internal stakeholders to ensure that there is not only a whole-of-government response from a taskforce perspective, but to also ensure that there is a whole-of-ATO approach for treatment of identified risks that may fall outside of the scope of the risks treated in the Phoenix Program.
Although the ATO is working with external partners through the forming of strong working partnerships, formal information gathering powers will be utilised to gather information, which in turn also provides that there is no issues from a breach of commercial confidentiality perspective.

Attendees

Attendees list
Organisation	Attendee
ATO	Nicholas Bell (Co-chair), Private Wealth
ATO	Anthony Marvello, Small Business
ATO	Lara Cavanough, Public Groups
ATO	Louise Clarke, Private Wealth
ATO	Marcus Ryan, Frontline Compliance
Arcem Advisory	Phil Shepherd
Australian Securities and Investments Commission	Carl Sibilia
Buildcorp	Jeff Jones
Chartered Accountants Australia and New Zealand	Karen Liew
Housing Industry Association	Reece Aglan
KPMG	Anna Chong
KPMG	Scott Farrell
Master Builders Australia	Melissa Byrne
Property Council of Australia	Kathy Zhang
Queensland Building and Construction Commission	Natasha Dennis-Weller
RSM	Adam Crowley
The Tax Institute	Simon Clark

Guest attendees

Guest attendees list
Organisation	Attendee
ATO	Carolynne McQuay, Private Wealth
ATO	David Mendoza, Individuals and Intermediaries
ATO	Jarred Needham, Private Wealth
ATO	Louise Hollis, Individuals and Intermediaries
ATO	Natasha Sekulic, Frontline Risk and Strategy
ATO	Peta Lonergan, Superannuation and Employer Obligations
ATO	Sally McNamara, Private Wealth
ATO	Tanya O’Callaghan, Office of the Chief Tax Counsel
ATO	Tim Sinclair, Private Wealth

Apologies

Apologies list
Organisation	Member
ATO		Amy James-Velagic (Co-chair), Private Wealth
ATO	Jill Kitto, Frontline Compliance
ATO	Nadia Alfonsi, Private Wealth
Alvarez & Marsal Australia & New Zealand	Matthew Evans
Australian Constructors Association	Meg Redwin
BDO	Marcus Leonard
Housing Industry Association	Alessandra Schladetsch
Master Builders Australia	Shane Garrett
Pitcher Partners	Simon Chun
Revenue NSW	David Allan
Urban Development Institute of Australia	Andrew Mihno