TITLE: 1 September 2026 Tax Update: DPN Review, Property Data Matching, and Business CGT Changes
Tuesday, 1 September 2026 brings several important Australia tax updates for directors, property owners, employees and growing businesses. The Australian Taxation Office (ATO) is facing an official review of its Director Penalty Notice process, while data matching has identified thousands of unreported investment property sales. Businesses should also prepare for upcoming CGT concession changes, new deduction rules and continuing crypto tax consultations.
Protect your company from a Director Penalty Notice
The Tax Ombudsman has launched a review into how the ATO administers Director Penalty Notices (DPNs).
The ATO issued more than 84,000 DPNs during 2024–25 to directors of approximately 64,000 companies. This represents a 136% increase compared with the previous financial year.
A DPN can make a company director personally liable for unpaid:
- PAYG withholding.
- Goods and Services Tax (GST).
- Superannuation Guarantee Charge (SGC).
The review will examine whether the ATO’s case selection, communication and recovery processes are fair and proportionate. It will also consider the position of directors affected by:
- Serious illness.
- Coercive or abusive directorships.
- Financial abuse.
- Resignation timing issues.
- A lack of awareness about company tax liabilities.
The review does not suspend ATO enforcement. Directors must continue to respond to DPNs within the applicable deadlines.
Under the ATO director penalty regime, the 21-day period generally begins when the notice is posted or left at the address registered with ASIC. It does not necessarily begin when you personally read the notice.
Complete this DPN compliance checklist
If you are a director of an Australian company in Sydney, Melbourne, Brisbane, Perth, Adelaide or elsewhere in Australia:
-
Review your ATO account regularly.
This helps you identify unpaid GST, PAYG withholding or superannuation before enforcement escalates. -
Lodge BAS and payroll reports on time.
Timely lodgement may prevent certain liabilities from becoming subject to lockdown rules. -
Reconcile your payroll and superannuation records.
This reduces the risk of hidden SGC liabilities and incorrect employee reporting. -
Keep ASIC records current.
A DPN may be posted to the registered address even if you no longer operate from that location. -
Act immediately if a DPN arrives.
The 21-day period is strict. Delaying action can restrict the options available to you.
We can help you keep bookkeeping, GST, BAS, payroll and tax records organised so potential liabilities are identified earlier.
Review every investment property sale before 31 October
The ATO has identified approximately 6,000 investment property sales made between 1 July 2020 and 30 June 2025 where owners may not have declared the resulting capital gain or loss.
The estimated tax liability is approximately $66 million.
The ATO’s data matching combines information from sources including:
- Banks and lenders.
- State and territory revenue offices.
- Land titles offices.
- Property managers.
- Settlement records.
- Conveyancing data.
The reported campaign focuses on investment properties. Principal place of residence sales are excluded from the identified campaign. However, special main residence rules can apply where a property was used as both a home and an investment.
The ATO generally expects a capital gain or loss to be reported in the income year when the contract of sale is signed, rather than the settlement date.
Affected taxpayers have reportedly been given until 31 October 2026 to lodge or dispute the ATO’s position. Taxpayers who do not engage may face a default assessment. Penalties of up to 75% of the tax shortfall may apply in serious cases, together with interest.
Check your property CGT position now
Use this checklist if you sold an investment property in Australia:
-
Find the contract date.
This confirms the relevant tax year. -
Locate the purchase contract and settlement statement.
These documents support your cost base calculation. -
Gather stamp duty, legal and agent costs.
Eligible acquisition and disposal costs may reduce the taxable gain. -
Review renovation and improvement invoices.
Capital improvements may affect the cost base. -
Check periods of private and rental use.
This is important if the property was previously your main residence. -
Review lodged tax returns.
Confirm that the sale and any capital gain or loss were reported correctly. -
Respond to ATO correspondence before the deadline.
Early action gives you a better opportunity to correct errors and explain the position.
Read the ATO’s guidance on property and capital gains tax before lodging an amendment or response.
Prepare for the $10 million small business CGT threshold
From 1 July 2027, the aggregated turnover threshold for the 50% active asset CGT reduction will increase from $2 million to $10 million.
This change is significant for Australian businesses that are growing beyond the traditional small business threshold.
However, the reform does not increase the threshold for every small business CGT concession. The following concessions remain subject to the existing $2 million turnover threshold or the $6 million maximum net asset value test:
- The 15-year exemption.
- The retirement exemption.
- Small business rollover relief.
The $10 million threshold applies specifically to the 50% active asset reduction. You will still need to satisfy the other eligibility conditions, including the active asset requirements and relevant ownership tests.
Treasury confirms the reform in its small business CGT explainer. Start reviewing your ownership structure, connected entities and aggregated turnover now. Accurate records will make it easier to assess eligibility when the new rules commence.
Track the $1,000 standard deduction consultation
The ATO is consulting on draft Law Companion Ruling LCR 2026/D5, which explains the new standard deduction for work-related expenses.
From the 2026–27 income year, eligible Australian tax residents who earn assessable labour income may claim a standard deduction of up to A$1,000 for eligible work-related expenses.
The measure is now law, but the draft ruling provides practical interpretation. It is important to remember:
- The deduction does not apply to the 2025–26 tax return.
- The maximum is g
