Australia’s 2026 tax reforms have generated extensive discussion around housing affordability, capital gains tax, discretionary trusts and the broader economy. Much less attention has been paid to how accounting firms expect the reforms to affect their day-to-day work.
To better understand that question, AuditCover surveyed a sample of accounting professionals in June 2026 about the practical implications of the reforms for their clients and practices.
The results were telling.
Eighty-eight per cent of the 99 respondents said they expect the reforms to result in more ATO reviews, audits or enquiries, while 77% reported that their practice currently absorbs some or all of the professional fees when clients face an ATO review or investigation.
These findings reflect the views of survey participants rather than a prediction of future ATO compliance activity. They do, however, provide an interesting snapshot of how many advisers are thinking about the current reform environment.
A period of transition
One reason many firms anticipate additional compliance work is that the 2026 reforms are being implemented over time rather than all at once.
Several significant measures have now been enacted, including reforms affecting capital gains tax, negative gearing, the $250 Working Australians Tax Offset and the optional $1,000 standard tax deduction. The same legislative package also introduced reforms affecting future gains on certain previously pre-CGT assets, expanded eligibility for the small business 50% active asset reduction by increasing the aggregated turnover threshold from $2 million to $10 million, and restricted new residential property limited recourse borrowing arrangements (LRBAs) for SMSFs.
Other measures, including the proposed discretionary trust minimum tax, remain subject to consultation and future legislation.
For advisers, this means clients may be asking questions about a combination of enacted law, announced policy and proposed reforms at the same time.
Why the reforms are creating more questions
Many of the enacted changes include commencement dates, grandfathering provisions or transitional rules.
Property is a good example.
For residential investment properties, the applicable tax treatment may now depend not only on when a property was acquired, but also on whether it is an established dwelling or an eligible new build.
Properties acquired before 7:30pm AEST on 12 May 2026 are generally grandfathered under the previous negative gearing rules.
Established residential properties acquired after that time continue under the existing rules until 30 June 2027, after which rental losses generally become quarantined and may only be offset against residential property income and relevant residential capital gains.
Eligible new residential dwellings continue to receive different treatment under the enacted legislation and, subject to satisfying the legislative requirements, remain eligible for full negative gearing and may elect to retain the existing 50% CGT discount for relevant post-1 July 2027 gains.
Capital gains tax has also become more nuanced, with new rules commencing from 1 July 2027 alongside transitional arrangements for existing holdings. At the same time, complying superannuation entities generally retain their existing CGT treatment, notwithstanding other superannuation reforms affecting SMSFs.
For many advisers, the challenge is less about understanding one new rule than understanding how multiple legislative regimes interact across different clients and assets.
Compliance remains an important focus
The ATO continues to operate extensive compliance and data-matching programs using information obtained from a range of sources, including Single Touch Payroll reporting, property transaction data and financial institutions.
Where information reported by taxpayers differs from information available to the ATO, the ATO may seek further information, undertake a review or, where appropriate, commence an audit in accordance with its compliance programs.
Payday super is another example of the broader shift towards more timely reporting. Although the legislation commenced on 1 July 2026, employers are generally required to ensure superannuation contributions reach employees’ superannuation funds within prescribed timeframes following each payday. Together with expanded Single Touch Payroll reporting, this provides more timely payroll information than under the previous quarterly framework.
None of this necessarily means there will be more audits. It does mean advisers are operating in an environment where both the legislative framework and the available compliance data continue to evolve.
The professional cost of responding
One of the more consistent themes emerging from our survey was concern about the time and professional resources required when clients become involved in an ATO review or investigation.
Whether an ATO review ultimately results in an amended assessment or not, responding often involves gathering documentation, reviewing historical transactions, preparing technical submissions, corresponding with the ATO and, in some cases, obtaining specialist taxation advice.
AuditCover’s claims data provides some insight into those professional costs.
Across the reporting period analysed, covered trust distribution review claims incurred average professional fees of approximately $7,800. Professional fees for more complex capital gains matters were often higher, although costs varied depending on the scope and duration of each matter.¹
What firms told us
While the survey identified differing views on individual reforms, one theme appeared consistently throughout the responses.
Many accountants described uncertainty—not necessarily about the policy direction itself, but about advising clients while some reforms have been enacted, others remain proposals and practical guidance continues to develop.
Clients rarely distinguish between legislation that has commenced, legislation that has been enacted but is not yet operative, and Budget announcements that have not yet passed Parliament.
Their advisers need to.
That increases the importance of careful research, documentation and communication during periods of significant legislative change.
Where tax audit insurance fits
Tax audit insurance does not change a taxpayer’s obligations or reduce the likelihood of an ATO review or audit.
Its purpose is to help cover eligible professional fees incurred in responding to covered ATO audits, reviews and investigations, subject to the policy wording, eligibility criteria, limits and exclusions.
For firms whose clients value access to professional representation throughout an ATO review or investigation, tax audit insurance may form part of their broader risk management approach.
Today, more than 500 accounting firms use AuditCover as part of their client offering. Book a demo with us to find out more.
This article contains general information only and does not constitute tax, legal or financial product advice. It has been prepared without taking into account any person’s objectives, financial situation or needs. Readers should obtain professional advice appropriate to their individual circumstances.
Survey findings refer to an AuditCover survey of 99 accounting professionals conducted in June 2026. The survey reflects respondents’ views and expectations and should not be interpreted as a prediction of future ATO compliance activity.
References to tax audit insurance are general in nature only and do not constitute a recommendation or advice. Cover is subject to the relevant policy wording, eligibility criteria, limits and exclusions, and may not respond to every audit, review, investigation, cost or circumstance. Tax audit insurance does not cover tax, penalties, interest or fines.
Some measures discussed in this article have been enacted, while others remain announced proposals or remain subject to further consultation and legislation. Legislative status should be confirmed before decisions are made.
¹ Based on AuditCover claims data for covered trust distribution review claims during the reporting period analysed. Average professional fees may not be representative of every claim and individual costs vary according to the nature and complexity of the matter.
