New research suggests that real estate professionals are among the most likely to come under scrutiny from the Australian Taxation Office.
REB’s sister brand, Accountants Daily, recently published its inaugural ATO Sentiment Report, showcasing what accountants across the country think about the frequency, nature, and tone of contact from the Australian Taxation Office, both to and with clients, whom it is targeting, and how such contact is being received.
The report, produced in partnership with Accountancy Insurance, covers the first quarter of the 2026–27 financial year, and was compiled on the back of a survey of more than 330 accountants nationwide, in August of this year, exploring how accounting practitioners and their clients are interacting with the ATO, with regard to the regulator’s enforcement and compliance activity.
Perceived ATO aggression
The headline findings from the report include:
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87 per cent of accountants think that the ATO has become somewhat or significantly more aggressive in its enforcement and compliance approach.
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More than half deem the intensity of ATO activity as high.
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7 in 10 accountants have clients who have experienced ATO contact for debt recovery.
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Nearly one in two accountants had more than 10 clients contacted by the ATO in the last quarter.
Survey respondents were also invited to provide free-text reflections on the ATO’s current approach, which by and large denote serious discontent with the regulator.
One respondent wrote: “The ATO has been conducting its activities on a ‘guilty until proven innocent’ basis, and been extremely aggressive and unprofessional when dealing with my clients, reducing many to tears.” It is, they said, “unacceptable”.
Another felt that the Tax Office’s approach is “making it harder for small businesses to do business”. They need, the respondent said, “to have a bit of leniency and understanding”.
Elsewhere, a practitioner said that “it seems that Tax Agents have progressed from being a partner to both the ATO and the client, to being viewed by the ATO as another adversary. We often see ourselves bypassed, so that our clients are contacted directly by the ATO, instead of us”.
This, they wrote, “causes undue stress to the client, and frustration for us, as we look incompetent because we aren’t on top of the communication”.
Professional services firms in the spotlight
Elsewhere, the survey examined which types of individuals and accounting clients are under the ATO’s microscope; the results offer an intriguing insight into whom, or what, the regulator is spotlighting.
Almost three in five (59 per cent) of respondents said they have clients in the construction and trades space that have faced Tax Office in the last quarter.
However, the next most-scrutinised cohort were clients in professional services and real estate (both 28 per cent).
On top of this, when asked which annual turnover band best describes those experiencing ATO activity, more than three-quarters (76 per cent) said businesses with less than $2 million in turnover. Within that demographic, 43.5 per cent of respondents said clients with $500,00-$2 million were contacted by the ATO, and 32.5 per cent of clients with less than $500,000 in turnover faced the same.
At the same time, less than 17 per cent of respondents with clients turning over between $2 million and $50 million were subject to ATO activity.
In short: real estate businesses, which have a smaller turnover than larger counterparts, are among the most likely to be targeted by the Tax Office for its enforcement and compliance activity.
Practitioners who responded to the survey felt strongly about their clientele being placed in the spotlight, particularly for those with smaller turnover. As one respondent put it, “the weak are being monitored more, and are likely to be driven out of business, I am afraid”. Another felt that the Tax Office’s approach is “making it harder for small businesses to do business”. They need, the respondent said, “to have a bit of leniency and understanding”.
Jerome Doraisamy, managing editor of professional services at Momentum Media, remarked that the findings are a wake-up call to any real estate business thinking that the regulatory spotlight only falls on other individuals and businesses.
“The ATO itself has recently indicated that it is ramping up its activity; for example, in September, it announced an 80 per cent jump in non‑lodgment prosecutions over the past two years from ‘dodgy shadow economy operators’ (referring to both legal and illegal economic activity that is not reported or taxed, such as workers missing out on their entitlements), leading to more than $2.7 million in fines,” he said.
“Against this backdrop, not to mention new obligations under the AML/CTF and Payday Super regimes, it is imperative that those in real estate get their houses in order – starting, first and foremost, with effective collaboration with their accounting partners.”
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