On 14 October 2025, the Victorian Government introduced the State Taxation Further Amendment Bill 2025 (the Bill) which is a wide-ranging legislative package that amends several key Acts affecting property, land tax, congestion levies, building permits, and more.
Key legislative changes
Commercial and Industrial Property Tax Reform Act 2024
The Bill makes targeted amendments to the Commercial and Industrial Property Tax Reform Act 2024 (CIPT Reform Act) to address technical anomalies and ensure the scheme operates as intended.
The key change is a tightening of the criteria for when a transaction causes land to enter the commercial and industrial property tax scheme. Under the new rules, a transaction will fall within the CIPT regime only if duty is payable on at least 50% of the land’s unencumbered value. This closes loopholes where nominal or minimal duty could previously result in land entering the scheme, such as in certain partitions or concessional transfers.
The Bill also clarifies the calculation of ‘entry interests’ and ‘qualifying transactions’, ensuring that only the portion of the interest on which duty was actually paid is counted for tax reform purposes. Transitional provisions ensure these amendments apply retrospectively from 1 July 2024, aligning the law with its intended operation from the commencement of the CIPT scheme.
Congestion Levy Act 2005
The State Taxation Further Amendment Bill 2025 introduces several important changes to the Congestion Levy Act.
Most notably, parking spaces used exclusively for residential purposes—including those in hotels, serviced apartments, and clubs providing accommodation, are now excluded from the congestion levy. This simplifies compliance for residential property owners and removes the need for a separate exemption provision.
The Bill also increases the congestion levy rates for 2026, setting them at $3,030 for category 1 levy areas and $2,150 for category 2 levy areas, with annual CPI adjustments from 2027 onwards. Additionally, the category 2 levy area is expanded, and the map of levy areas will now be published online by the Commissioner of State Revenue, improving transparency and accessibility for affected businesses.
The new rules introduce exemptions and concessions:
- Parking spaces at government schools and boarding premises are exempt from the levy if provided free of charge.
- Parking spaces set aside exclusively for retail customer parking in the category 2 area receive a 50% concession if provided free for the first hour or to customers making a purchase.
Finally, the Bill imposes new registration requirements for owners and operators of car parks in the expanded levy area, with clear deadlines for registration to ensure proper administration and compliance.
Duties Act 2000
New Zealand citizens
A key amendment relates to New Zealand citizens and the foreign purchaser additional duty. Previously, the exemption for New Zealand citizens was based on holding a ‘special category visa’, which could lead to inconsistent outcomes depending on whether the individual was physically present in Australia at the time of settlement.
The Bill replaces this with a new residency test. The provisions outline that New Zealand citizens will only be exempt from the foreign purchaser duty if they ordinarily reside in Australia for at least six months within a defined period around the transaction. This change ensures that the exemption is available to genuine residents and closes a loophole that allowed non-residents to avoid the surcharge.
Custodian transfers
The Bill also introduces a new exemption for transfers of dutiable property involving custodians and sub-custodians under a trust. This addresses practical issues in trust administration, where property may need to be transferred between different custodians or trustees without any change in beneficial ownership. The exemption applies only to ‘internal’ transfers within a pre-existing and continuing trust, and not to transfers that alter the beneficial interests.
Tax reform scheme land
Further amendments to the Duties Act clarify the treatment of ‘entry interests’ for land entering the CIPT reform scheme. The Bill sets out new rules for calculating the quantum of an entry interest when a transaction is subject to a duty exemption or concession (other than certain reductions), ensuring that only the portion of the interest on which duty was actually paid is counted. This prevents anomalous outcomes where nominal duty could result in a larger interest being recognised for tax reform purposes.
Land Tax Act 2005
The Bill introduces several significant changes to the Land Tax Act 2005, with a focus on integrity and fairness of Victoria’s land tax regime.
The Bill substitutes the definition of a ‘natural person absentee’ to introduce a new requirement that a person who is not an Australian citizen or resident will be an absentee if they were absent from Australia for a total of 6 months during the previous calendar year.
New Zealand citizens
One of the most notable amendments is the introduction of a residency test for New Zealand citizens in relation to the absentee owner surcharge. Previously, New Zealand citizens could avoid the surcharge simply by being present in Australia on 31 December, regardless of their actual residency status. The Bill now requires that only New Zealand citizens who ordinarily reside in Australia will be exempt from the absentee owner surcharge, closing a loophole and ensuring that the surcharge applies more equitably.
Temporary residences
The Bill also creates a new exemption for land with temporary residences with the introduction of new sections 63A to 63H. This exemption is designed to support individuals who use temporary residences as their principal place of residence. Under the new legislation, a temporary residence is defined as any structure or vehicle that is capable of being used for habitation and for which an occupancy permit is not required. The Bill outlines that caravans, motorhomes, trailers, tents, sheds, and barns are examples of temporary residences.
The Bill outlines land will be ‘temporary residence land’ if:
- there is a temporary residence on the land
- there is no building affixed to the land for which an occupancy permit is required (including a building under construction or renovation)
- the land is not used by any person to carry on a substantial business activity
- the land is in a zone other than a non-residential zone
- the taxable value of the land is less than $300,000
- the owner of the land does not own any other land in Victoria.
The new provisions apply only if a natural person or vested beneficiary uses and occupies the property as their principal residence, and they preclude the exemption from applying if rent is paid by or on behalf of the vested beneficiary for use and occupation of the land.
This change recognises the diversity of living arrangements in Victoria and provides relief to those who might otherwise be unfairly taxed.
Vacant residential land tax
The Bill makes several targeted changes to the vacant residential land tax (VRLT) provisions.
Firstly, the definition of ‘alpine resort’ is expanded to include land located within the Dinner Plain locality, meaning residential land in Dinner Plain will be excluded from VRLT, recognising its seasonal nature similar to other alpine resorts.
Secondly, the deadline for owners to notify the Commissioner about vacant residential land and to apply for exemptions is moved from 15 January to 15 February each year, giving property owners additional time to comply with their obligations.
Thirdly, a new exemption is introduced for properties that were residential land at both the start and end of the preceding year but were not residential land for a period during that year, such as when a home is undergoing significant renovations or repairs. This ensures owners are not unfairly taxed when their property is temporarily uninhabitable due to genuine works.
Hardship
The hardship relief provisions have also been updated. The threshold for applications for hardship relief from land tax liability has been increased from $1,000 to $5,000, making relief accessible to a broader group of taxpayers. Importantly, the requirement for Treasurer approval has been removed, streamlining the process and allowing the Commissioner of State Revenue to grant relief directly.
Other changes
The Bill also introduces changes to the First Home Owner Grant and Home Buyer Schemes Act 2000, expanding eligibility for New Zealand citizens. Under the new provisions, New Zealand citizens can qualify for the First Home Owner Grant based on residency, rather than visa status, ensuring fairer access for genuine residents. The Bill also modernises administrative processes by clarifying when electronic service of documents is considered effective.
In relation to the Building Act 1993, the Bill clarifies and strengthens the calculation of building permit levies, particularly for cost-plus contracts, and requires more accurate reporting of building costs. It validates past estimates and calculations to prevent disputes and ensure certainty for builders and property owners. Additionally, consequential amendments are made to related Acts to align with the new calculation methods, supporting a more robust and transparent building permit levy system.
How SW can help
SW’s state tax specialists can help you interpret the new rules, assess your exposure, and optimise your position under the amended legislation. These changes are significant, affecting property, land tax, congestion levies, building permits, and more, and may have a direct impact on your property, business, or compliance obligations. Understanding the amendments is crucial to ensure accurate planning, avoiding unexpected liabilities, and taking advantage of available exemptions or concessions.
Contact your SW advisor to discuss how these changes may affect you and ensure you are well-prepared under the updated legislation.
Key contacts
SW Accountants & Advisors is delighted to announce the appointment of Andrew Jones as Consulting Director in our Corporate Finance team in Sydney.
Andrew brings over thirty years’ experience advising clients on M&A and capital raising deals, having worked with ASX-listed companies, multinationals, private businesses, private equity funds, and other financial investors.
Duane Rogers, CEO of SW said “We are thrilled to welcome Andrew to our Sydney Corporate Finance team. His depth of experience and proven track record in deal advisory and client service will be invaluable as we continue to grow our presence in Sydney and deliver exceptional outcomes for our clients. Andrew’s commitment to excellence and his collaborative approach perfectly align with SW’s values and our vision for the future.”
Andrew’s career spans senior roles at PKF Corporate Finance, Deloitte, Pepper Money, Sabre Group, and KPMG in Sydney and London. He is recognised for his expertise in financial due diligence, lead advisory, and valuation services across industries including real estate, financial services, transport, mining, energy, manufacturing, and consumer products.
“I’m excited to be joining SW’s Corporate Finance team to help SW continue its strong growth and outstanding track record of delivering high quality services to its clients. I’m very impressed by the consistently high calibre of SW’s partners and staff and am really looking forward to identifying opportunities for SW’s clients and the clients and people that I have worked with over the past thirty years,” said Andrew Jones.
This appointment reflects SW’s ongoing commitment to expanding our capabilities and supporting our clients’ ambitions in the Sydney market and beyond.
Media inquiries
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SW Accountants & Advisors
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New Payday Super legislation will mean employers now have about eight months to prepare their systems and processes. The requirements are expected to intensify Australian Taxation Office (ATO) scrutiny and increase administrative workloads for payroll.
After months of anticipation, on 9 October 2025, the Australian Treasury introduced legislation to Parliament to implement the Government’s Payday Superannuation proposal. This marks a significant change to how superannuation guarantee (SG) obligations are determined, paid, and reported. As highlighted in our previous article, ‘Payday Super – Consultation crucial to avoid an administrative and penalty minefield’, these changes are expected to have broad operational impacts for employers and payroll teams.
In less than eight months, from 1 July 2026, employers will be required to pay SG contributions within seven business days of each payday, replacing the current quarterly cycle.
The reform aims to reduce the estimated $5.2bn in unpaid superannuation and improve retirement outcomes for Australian workers. While the policy has been broadly welcomed, it introduces new compliance obligations and operational challenges that may place additional pressure on employers and their payroll teams.
Key developments
Earlier this year, the Australian government released draft legislation outlining the proposed shift to payday-based SG contributions. It required employers to pay contributions within seven calendar days of each payday and introduced a redesigned Superannuation Guarantee Charge (SGC) framework. This included the following:
- a re-allocation of super contributions to the earliest payday if there are shortfalls
- daily compounding variable interest
- an annual maximum contributions base
- alignment of superannuable earnings for calculation of the charge
- greater choice loadings
- new administrative and late payment penalties.
The updated bills include several refinements, most notably, the timeframe for SG payments has shifted from calendar days to business days, aligning time requirements with typical business practices. Employers now have 20 business days to make contributions to a new employee’s fund or when contributing to a new fund for an existing employee.
Concessional FY26 compliance approach
The ATO has released Draft Practical Compliance Guideline PCG 2025/D5 outlining the compliance approach for the first year of implementation. It sets out a risk-based framework that categorises employers as low, medium, or high risk based on their payment behaviour.
While it offers welcome relief for employers that make good attempts to adhere to the new rules, it does confirm that there is no intended amnesty for SGC under the new rules. It also signals a likely change to the ATO’s enforcement strategy from reactive to a targeted risk-based approach. This is made possible through a richer dataset from superannuation funds and payroll reporting.
To facilitate a more pro-active compliance approach, the ATO will need to significantly increase its internal compliance and data resources. It will also need to develop sophisticated data models to assess employer compliance, account for any legitimate updates to employer information, and calculate the SGC when non-compliance is identified. These requirements could intensify early implementation challenges and place significant pressure on both existing and new ATO resources under the updated framework.
Preparing for the change
This is one of the most significant payroll changes since Single Touch Payroll, impacting not just the frequency of superannuation payments but also multiple operational systems, processes, and the ATO’s compliance approach.
Employers have eight months to consider a range of matters, which may include the following:
| Systems/Processes | Examples |
|---|---|
| Payroll system | • Implementation of updates by software providers • Updates to payroll configuration for Single Touch Payroll changes, including categorising wages codes for “qualifying earnings” • Configuration for actual superannuation obligations (if different) • Address complexities arising from the shift to an annual maximum contributions base, such as handling non-superannuable bonuses for high earners |
| Employee onboarding processes and choice obligations | • Ensuring compliance with choice obligations • Shorter timelines may require shorter more efficient processes (e.g. making superannuation stapling processes more efficient due to shorter timeframe) |
| Superannuation payment and reporting/clearing house processes | • Shorter timelines may require shorter more efficient processes (including managing routine issues with change in superannuation funds and clearing house reporting) • Navigating any complexity merging off-cycle pay run superannuation obligations with normal cycle |
| Payroll system wage code setup processes | • May need to be updated for any additional configuration fields |
| Processes for monitoring whether shortfalls have occurred and dealing with shortfalls/late payments | • Increased transparency and focus from the ATO as well as more frequent tight deadlines are likely to result in most employers having to deal with shortfalls • Given the increase in frequency for many employers, setting up processes to track when shortfalls occur and whether they have been dealt with • Setting up methodologies and processes for making and calculating voluntary disclosures of shortfalls to the ATO |
The ATO’s compliance approach has historically been reactive and not data driven (i.e. relatively manual) with SGC disclosures largely being voluntary or due to employee complaints. This is reflected in internal testing programs run by employers as well. For example, most testing programs stop at payroll system outcomes and do not test contributions at the fund level or choice of fund obligations. As a result, employers may find that current processes would not stand up to the requirements under the new regime.
The new rules also similarly require disclosures by employers where shortfalls have occurred. The new charge calculations are complicated, and without ATO tools, systematic shortfalls may be beyond the ability of most employers to calculate broadly.
There is the potential for significant stress on payroll teams as they grapple with implementing payroll system updates/changes in a short timeframe, manage more frequent superannuation processing, and adapt to new processes/legislative rules.
This underscores the importance of early preparation and robust internal controls to mitigate compliance risks under the new requirements.
How SW can help
Our team has supported some of Australia’s largest superannuation rectification programs, giving us deep insight into the complexities of superannuation systems and compliance. Drawing on this experience, we recommend a proactive approach to the upcoming changes, including:
- comprehensive testing of payroll and superannuation systems to identify and address gaps
- mapping change requirements across people, systems, and processes
- supporting the implementation of necessary updates to ensure compliance
- providing training and resources (e.g. develop tools) to equip your teams for the new requirements
- assisting with ongoing compliance monitoring and reporting.
Early engagement will help your organisation minimise compliance risks, reduce administrative burden, and ensure a smooth transition to the new payday superannuation requirements.
Our specialists are ready to work with you to develop a tailored implementation plan that ensures your systems, people, and processes are prepared well ahead of 1 July 2026. Beyond implementation, SW can continue to support your organisation with compliance monitoring, process reviews, and strategic advice as the ATO’s data-driven compliance framework evolves. Preparing early not only reduces risk but also positions your business to respond efficiently to future payroll and superannuation reforms.
Contributor
On 22 September the Australian Tax Office (ATO) published the key compliance focus areas it will be targeting when reviewing privately owned and wealthy groups for the 2025 and 2026 financial years. The ATO has signalled increased scrutiny across governance, trusts, CGT concessions, and more.
The ATO’s aim, in publicising its programs and focus areas, is to encourage taxpayers to identify and address risks and to improve voluntary compliance.
This presents an opportunity for private groups to review their governance frameworks, validate tax positions, and ensure readiness for future interaction with the ATO.
Private wealth group demographics
The ATO estimates there are about 284,000 private wealth groups in Australia. These groups are divided into three categories, and each category is reviewed differently as part of the ATO’s compliance programs:
| Market segment | Criteria | Estimated population size |
|---|---|---|
| Top 500 | • $500m in net assets, or • > $200m in turnover and > $250min net assets, or • ‘market leaders or groups of specific interest’ | 425 groups |
| Next 5,000 | • Australian individuals that (together with associates) control wealth > $50m | 8,200 groups |
| Medium and emerging | • Australian individuals that (together with associates) control wealth between $5m and $50m • Australian privately owned businesses with annual turnover > $10m | 275,475 groups |
ATO focus areas for private wealth groups for the 25/26 income year
Tax governance – a major (and increasing) priority
Tax processes are likely to be more centralised and concentrated in private groups than in public groups. Nonetheless, the ATO expects privately owned and wealthy groups to maintain a documented tax governance framework that clearly outlines roles, responsibilities, and escalation protocols for tax issues.
Aspects that the ATO are likely to focus on in this context include:
- processes for active identification, monitoring, and management of tax risks
- decision-making in relation to tax matters supported by documentation and specialist advice
- alignment of frameworks and processes with the ATO’s justified trust framework.
Claiming of CGT concessions
A number of CGT concessions are flagged for attention by the ATO as being risk areas. These include:
- eligibility for the CGT discount
- groups that inappropriately seek to access the small business restructure rollover provisions
- eligibility for other small business CGT concessions that are claimed
- arrangements where capital gains are distributed to foreign beneficiaries of trusts and capital gains are disregarded.
The ATO will be looking to ensure that eligibility conditions for the above concessions are met and appropriate documentation to support or evidence the concessions is maintained.
Various issues relating to trusts
Trusts are widely used in private groups and the ATO has indicated a particular interest in the following matters:
- section 100A – distributing to lower-taxed beneficiaries where there is a reimbursement agreement under which a person or entity other than the beneficiary effectively obtains the use or benefit of the relevant funds
- application of trustee beneficiary non disclosure tax where there are circular trust distributions
- distributions made by trusts that have made a family trust election or interposed entity election outside the relevant ‘family group’ that may trigger family trust distribution tax
- eligibility to claim franking credit tax offsets where distributions are made to newly incorporated company beneficiaries that may not meet the 45 day holding rule.
Division 7A
Division 7A is predictably a key area of focus of the ATO. In particular, they are monitoring common risk areas, including:
- failure to make required minimum yearly repayments
- non-complying (or non-existent) loan agreements
- arrangements designed to circumvent Division 7A with guarantees of third-party loans by private companies.
Other issues on the hit list
The ATO has also shown interest in several areas, including:
- lifestyle assets, which potentially raise various tax issues (for example, lifestyle assets being treated as business related, rather than person use assets, Division 7A and GST issues)
- succession planning – the ATO are interested in mechanisms employed in relation to intergenerational wealth transfer where business restructures or transfers of assets are involved.
Property and construction industry
The property and construction industry remains a focus for the ATO.
Areas of focus including:
- capital vs revenue treatment
- GST and margin scheme
- Non-arm’s length dealings within entities in the same private group to reduce their taxable income
- Failure to lodge or report sales or income (particularly subcontractors) as identified by the ATO through the TPAR.
Other industries
Other industries of focus include the following:
- tax advisers and professional firms
- private equity transactions and activities
- retail operations
- cross-border transactions
- crypto assets
- use of tax-exempt or concessionally taxed entities (super funds and not-for-profit entities, including ancillary funds).
How SW can help
The ATO is increasingly active in conducting reviews and audits of private groups. Being aware of these key focus areas is essential. Preparing in advance helps private groups manage risks effectively and maintain strong governance, which can minimise potential issues and ensure compliance.
SW have deep experience in advising private groups on tax governance frameworks, processes, and the various areas of interest highlighted above. We also have extensive experience in managing ATO reviews and audits.
Please contact us should we be able to assist in ensuring that your group is well prepared for any ATO review.
Contributor
Treasurer Jim Chalmers has significantly watered down the government’s proposed $3m superannuation tax amid criticism from tax experts and investors.
The government has confirmed several important changes to the Division 296 proposed superannuation tax reforms. The updated measures aim to improve fairness while reducing the administrative burden and unintended impacts of the original proposal.
We’ve summarised the key updates and the practical steps you can take to prepare.
Key changes announced
Tax to apply only to realised earnings
The government has scrapped its plan to tax unrealised capital gains on super balances above $3m. The revised proposal will now apply only to future realised earnings, addressing major concerns about fairness and liquidity raised by tax professionals and fund managers.
Indexation of the $3m threshold
The $3m threshold will now be indexed in line with other superannuation limits. This change ensures that inflation and market growth do not gradually push more Australians into the higher tax bracket over time.
New $10m tier introduced
A second tax threshold of $10m will be introduced which will create a more progressive structure. Earnings between $3m and $10m will be taxed at 30%, while earnings above $10m will attract a 40% rate. Both thresholds will be indexed.
Implementation delayed until 1 July 2026
The introduction of the new tax has been delayed by one year, giving super funds, advisors, and affected members additional time to prepare. This adjustment also reduces the short-term impact on the federal budget.
Defined benefit pensions to be included
The revised design will ensure the new tax also applies to defined benefit pensions, maintaining consistency and fairness across different types of superannuation interests.
Boost for low-income earners
The Low Income Super Tax Offset (LISTO) will rise from $500 to $810, and the income eligibility threshold will increase from $37,000 to $45,000 from 1 July 2027. These changes will benefit an estimated 1.3m Australians, particularly women and part-time workers, helping them grow stronger retirement savings.
Budget impact of the reforms
Treasurer Chalmers confirmed the refinements will cost around $4.2bn over the forward estimates, mainly due to the one-year delay in implementation. He said the reforms “maintain the concessional treatment of superannuation, but ensure it is provided in a more equitable and sustainable way.”
How SW can help
Our superannuation and tax specialists can help you understand how these changes may affect your personal or business super strategy.
We can:
- review your super balance and investment mix to assess future tax exposure
- identify planning opportunities to manage contributions and withdrawals
- advise on the best way to structure your super for long-term efficiency and compliance.
These reforms will evolve as legislation progresses, so early planning is key. Contact your SW advisor to discuss how the new thresholds and timing changes could affect your retirement strategy.
Contributor
On 22 September 2025, ASIC published a new report that details a high-level review on the private credit market in Australia.
The purpose of the report is for ASIC to give insights on what good operating practices look like and to share some improvements for some operators to adopt. It also highlights emerging risks and areas where greater transparency and governance are needed to protect investor interests.
Key takeaways from the article published by ASIC
- Private credit plays a valuable role in the Australian economy, complementing bank and public market lending
- The market has grown significantly post-GFC, now estimated at $200 billion, with ~50% in real estate-focused finance
- Growth is driven by superannuation inflows, institutional investment, and demand for yield.
Key issues identified
Conflicts of interest
The review uncovered several critical areas where conflicts of interest and transparency challenges frequently arise. These issues are common across fee structures, valuations, related party transactions, and loan structuring. In some cases, managers retain 50–100% of borrower-paid fees, creating a clear misalignment with investor interests. Additionally, the use of special purpose vehicles (SPVs) to capture excess interest margins further reduces transparency and makes it harder for investors to fully understand the fund’s true economics.
Fees and remuneration
Significant concerns were raised about fee transparency and how remuneration aligns with investor interests. Often, fee structures are opaque and inconsistently disclosed, making it challenging for investors to understand the true cost of their investment. In some cases, managers earn several times the disclosed management fee through hidden borrower-paid fees. To promote transparency and comparability, best practice calls for all fees, regardless of how they are charged, to be clearly disclosed as a percentage of fund assets.
Portfolio transparency and valuations
The report highlighted inconsistent valuation methods and transparency issues that may mislead investors about the true performance of private credit portfolios. Valuation practices differ widely across funds, with many lacking quarterly independent valuations. For real estate-backed loans, valuations often depend on gross rent or projected completion values, which can significantly inflate asset values. Furthermore, some funds report no impairments, a practice that seems inconsistent with expected default rates and raises questions about the accuracy of their portfolio reporting.
Terminology
Inconsistent use of key terms such as “investment grade,” “senior debt,” and “LVR” contributes to investor confusion and risks misrepresenting the true level of risk. This lack of clarity can lead to misunderstandings about the quality and safety of investments, making it harder for investors to make informed decisions.
Investor protection concerns
Several investor protection concerns were identified, particularly affecting retail and wholesale investors relying on sophisticated investor exemptions who face higher risks due to a lack of transparency. The report also highlights that real estate construction and development finance is a high-risk, concentrated sector, which may pose potential systemic risks. Additionally, distributions in some real estate funds may be paid from capital rather than income, raising further concerns about the sustainability and safety of returns.
Recommended good practices
ASIC recommends several good practices to enhance transparency and investor protection, including quarterly fund composition reporting that covers impairments, PIK loans, and distribution sources. Independent quarterly valuations should be conducted to ensure accuracy, while full and transparent fee disclosure, including all borrower-paid fees, is essential. Clear definitions of key investment terms are important to reduce confusion, alongside comprehensive disclosure of leverage, liquidity mechanics, and governance structures to provide investors with a complete understanding of the fund’s operations.
Regulatory issues for ASIC’s consideration
The lists below highlight key areas for ASIC’s attention, identifying market practices and operational issues where enhancements can benefit both the market and investors. Raising standards and improving disclosure in these areas are essential steps toward strengthening trust and confidence in Australia’s private credit sector.
Priority issues
- remuneration and fee disclosure
- related party transactions and governance
- valuation frequency and independence.
Secondary issues
- liquidity mismatch
- investment reporting standards
- terminology clarity
- sector concentration risks.
International comparisons
- Australia lags behind the US and Europe in transparency and regulation
- overseas markets are moving toward greater disclosure, especially for retail investors
- examples include the UK LTAF, EU ELTIF, and Singapore MAS initiatives.
Systemic risk
- not currently a major concern, but real estate development and retail investor exposure are areas to monitor
- ASIC could consider a reporting framework to track systemic risks and market integrity.
At SW we regularly assist private credit providers to structure their operations in a way that is transparent, tax effective, and protects investors. Our financial services team can also offer insights into the most effective systems to use as well as provide accounting and assurance services.
In our experience, private credit providers face several complex challenges during the start-up phase. These include setting up systems, establishing tax structures, ensuring compliance, and building the right relationships and support networks. Addressing these areas early is crucial for enabling business growth and maximising its potential.
More mature private credit funds tend to encounter increasingly complex issues, often related to compliance, sustaining growth, and maintaining the quality of their loan portfolios. Navigating these challenges requires robust operational frameworks and ongoing oversight.
Putting good operating structures in place, such as those recommended by ASIC, not only positions private credit providers for long-term success but also protects investors, creditors, and directors from compliance risks and financial setbacks.
How SW can help
Our financial services team has deep experience working with private credit providers across all stages of maturity. We offer tailored solutions to help start-ups establish strong foundations and support mature funds in managing growth, regulatory compliance, and portfolio quality. From designing transparent fee structures to implementing governance frameworks and performing independent valuations, we provide end-to-end support that promotes operational excellence and investor confidence.
The Federal Government has released draft legislation that will bring cryptocurrency exchanges and custody platforms under the Australian Financial Services Licence (AFSL) regime, marking a substantial shift in how digital asset platforms are regulated in Australia.
The reforms are designed to improve investor protection within an emerging sector as some platforms have ineffective risk management as well as being largely unregulated in Australia. It aims to strengthen governance and align crypto with the standards already applied to traditional financial services.
Bringing crypto in line with AFSL is expected to create consolidation within the sector and targets crypto exchanges rather than at the token level.
Key changes
- New categories under the Corporations Act 2001 will recognise digital asset platforms (DAPs) and tokenised custody platforms (TCPs)
- These entities will be required to obtain an AFSL and meet obligations consistent with traditional financial service providers
- The draft framework sets out obligations relating to custody, settlement, tokenisation, staking, governance, disclosures and consumer protection standards
- Significant penalties will apply for operating without a licence, with some exemptions proposed for smaller operators
What the draft law proposes
The proposed changes amend the Corporations Act 2001 to introduce two new categories of financial service providers:
- Digital Asset Platforms (DAPs): Operators of trading platforms for crypto assets.
- Tokenised Custody Platforms (TCPs): Custodians of digital assets on behalf of clients.
Entities falling into these categories will be required to:
- hold an AFSL, with obligations largely aligned to those already imposed on traditional financial services providers.
- implement and maintain controls for custody and settlement of digital assets.
- comply with requirements on tokenisation, staking, governance, disclosures and consumer protection.
- submit to ASIC oversight, including reporting obligations and enforcement measures.
The regime proposes threshold exemptions for smaller operators. For example, platforms with client holdings below $5,000 per person or with annual transaction values under $10 million may not need to hold a licence. However, these exemptions are tightly defined and will not apply to most exchanges operating at scale.
Penalties for non-compliance
The penalties set out in the draft legislation are significant. Operating without an AFSL could attract fines up to $16.5 million, or a percentage of turnover or profit derived from unlicensed activities. This brings crypto regulation into line with other parts of the financial services sector where strong deterrence measures apply.
Implications for the industry
For many crypto exchanges and custodians, this will be the first time they are required to meet obligations such as:
- annual and continuous reporting to ASIC.
- preparation of audited financial statements in line with Australian Accounting Standards.
- maintenance of sufficient financial resources to comply with licence conditions.
- demonstration of effective internal processes, controls and governance frameworks.
- the draft legislation also highlights areas of focus for regulators, including consumer protection, asset segregation, valuation of digital assets, cyber security, and the robustness of custody arrangements.
Audit considerations
The changes carry significant implications for AFSL audits. Crypto entities will be required to obtain assurance over governance structures, custody processes and financial resource requirements. Auditors will need to assess the operating effectiveness of internal controls, review the accuracy of financial projections, and test compliance with both the AFSL framework and guidance such as GS003 issued by the Auditing and Assurance Standards Board.
There will also be an increased focus on digital asset risks, transparency, and the robustness of control environments. For many operators who have not previously prepared financial statements under Australian Accounting Standards, complex financial reporting matters are likely to arise which will require a high level of skill and experience in the sector to address.
How can SW help?
We recommend that organisations begin preparing now by assessing whether the regime applies to their business, reviewing current practices against the proposed obligations, and developing compliance plans well ahead of implementation. Engaging advisors early will be key to identifying gaps and reducing the risk of non-compliance, while staying across ongoing consultation and ASIC guidance will be essential as the regulatory detail develops.
SW has a dedicated financial services team that advises cryptocurrencies, banks, fund managers, superannuation providers and brokers, and we meet regularly to share insights on emerging regulatory issues and industry trends. Our focus is on conducting efficient audits that address the risks of material misstatement, ensure compliance with Australian Accounting Standards, and provide clear reporting on governance and control effectiveness in line with GS003.
With extensive experience in AFSL audits, our team is ready to help digital asset businesses understand and prepare for the new licensing environment.
The Federal Court of Australia, in a series of four cases involving Coles and Woolworths, ruled that both employers breached workplace laws by failing to correctly pay award entitlements to salaried managers.
The Court found that annual salaries cannot be used to offset overtime and penalties across pay periods, and that employers must meet award obligations in each pay cycle with accurate time records.
What has happened
On 5 September 2025, the Federal Court handed down its verdict in Fair Work Ombudsman v Woolworths Group Limited; Fair Work Ombudsman v Coles Supermarkets Australia Pty Ltd; Baker v Woolworths Group Limited; Pabalan v Coles Supermarkets Australia Pty Ltd [2025] FCA 1092.
The Court examined a range of issues and found both Coles and Woolworths breached workplace laws. The headline issue was clarified regarding the interaction between annual salaries and award entitlements under the Fair Work Act. It was ruled that annual salaries cannot be used to offset overtime, penalty rates, or allowances across multiple pay periods.
Instead, employers must ensure each pay cycle independently satisfies the minimum conditions set out in the relevant award. This brings the effectiveness of annualised arrangements into question, as remediation payments may be required for any pay period in which award entitlements exceed the annualised salary.
In addition to the offsetting matter, the Court considered a range of other issues, including:
- all-inclusive annual salary arrangements do not remove the requirement to keep records of entitlements. Employers must not only keep time and work records but also interpret and classify the time and work into a record of an employee’s entitlement. A breach of record-keeping requirements may shift the burden of proof to employers
- confirmation that leave and rostered public holidays not worked count as hours worked (e.g. for determining overtime based on cumulative time calculations)
- confirmation that for agreements to be effective, employees must also understand that they are forgoing rights under the Award
- approval of a methodology for calculating underpayments where records were incomplete or missing.
A further case management hearing is listed for 2 October 2025. It is also possible that Coles and Woolworths may appeal the decision.
Implications for employers
If not appealed, this decision may have significant implications for employers that rely on annual salary arrangements to cover employee entitlements arising out of industrial instruments. Retrospectively, this may mean that wage underpayments could arise even where employees are better off on an annual basis. Going forward it may mean that employers need to retain better and more sophisticated records, calculate notional Award or EBA-based salaries for record-keeping purposes, and top up employee salary on a periodic basis if necessary.
How SW can help
Given the current uncertainty surrounding the case management hearing and its potential outcomes, we recommend that employers take this opportunity to review and assess any potential gaps or areas of exposure.
SW can assist by:
- conducting gap and risk assessments across employment arrangements, payroll systems, timekeeping processes, and record-keeping practices to identify where entitlements may not be met or where obligations are unclear
- developing simple testing models to help clients estimate underpayment exposure and assess risk – whether using existing data or scenario-based assumptions
- supporting clients to reconstruct detailed entitlement records using available time and attendance data (e.g. clock-in/out logs) and identify where further tracking or classification may be needed.
Whether you have robust data or limited records, we can help you understand your exposure and take practical steps to reduce legal and financial risk.
To find out how SW can tailor a solution to your organisation’s needs and safeguard your compliance, get in touch with our team today.
Contributor
AusIndustry has made changes to the application form used for registering research and development (R&D) activities for the Research and Development Tax Incentive (R&DTI).
On 15 August 2025, AusIndustry released an updated version of the application form for registering R&D activities on the R&DTI portal. This new form must be used for all future applications. Any draft applications created before that date were deleted.
The R&D Tax Incentive is one of Australia’s key programs for driving innovation. It offers a tax offset designed to encourage companies to undertake research and development activities they might otherwise avoid due to financial risk. The incentive allows companies to invest more in innovation, boosting their competitive edge while contributing to Australia’s economic growth.
To be able to claim the R&DTI, R&D activities must be registered on the R&DTI customer portal within 10 months after the end of the relevant income year. While the program’s eligibility criteria remain unchanged, the updated application form now requires more detailed information. The updates include the addition of new questions and an increase in character limits for questions that previously had character limits of 1000 to 4000.
The table below sets out all the new and updated questions in the application forms:
| Section | Question | Format |
|---|---|---|
| Projects | How much did the R&D Tax Incentive influence whether you went ahead with this R&D project? | Drop down list options: • Significantly • Somewhat significantly • Not at all |
| Describe what documents you have kept, or intend to keep, in relation to the activities in your project. | Text field character limit: 4000 | |
| Is the location of majority of R&D activities the same as the main business address provided? | Radio button options: • Yes • No | |
| Briefly describe the plant and facilities to be allocated to the project (specialist equipment, facilities etc.) | Text field character limit: 4000 | |
| To establish whether the company will be a beneficiary of the proposed R&D activities, please describe whether the company will: effectively own the know-how, intellectual property, or other results arising from the project have control over the direction and conduct of the R&D activities and bear the financial burden of carrying out the activities. | Text field character limit: 4000 | |
| Core activities | Describe the core R&D activity | Text field character limit: 4000 |
| Is the entity who will conduct this core R&D activity a connected or affiliated entity? | Radio button options: • Yes • No | |
| Is the core R&D activity being conducted under an agreement the R&D entity has with a connected or affiliated entity who is located outside of Australia? | Radio button options: • Yes • No | |
| Country of residence for company performing this core R&D activity? | Drop down list | |
| Supporting activities | Is the entity who will conduct this supporting R&D activity a connected or affiliated entity? | Radio button options: • Yes • No |
| Is the supporting R&D activity being conducted under an agreement the R&D entity has with a connected or affiliated entity who is located outside of Australia? | Radio button options: • Yes • No | |
| What evidence did the company keep about this supporting R&D activity? | Text field character limit: 4000 |
The recent changes to the application form reflects a shift towards greater self-assessment and compliance at the application stage. We recommend that companies carefully review and reassess their current application preparation process.
How SW can help
SW’s R&D Tax & Government Incentives team offers practical support to help businesses navigate the updated R&DTI application process. With extensive experience in preparing and reviewing claims, we can assist with understanding new requirements, strengthening documentation, and ensuring compliance. Whether you’re new to the incentive or refining your approach, our team is here to guide you every step of the way.
Contributors
The Victorian State Revenue Office (SRO) has provided some clarity on how service fees and beneficial ownership calculations impact land transfer duty obligations.
With the rulings to take effect from 1 July 2025, the Victorian SRO issued draft revenue ruling DA-067 and final versions of revenue rulings DA-065 and DA-066 which consider the treatment of economic entitlements under the Duties Act 2000 (Vic) (Duties Act).
Economic entitlements
Under the Duties Act, an economic entitlement arises when a person gains access to the economic benefits of land such as income, capital growth, or sale proceeds, without acquiring ownership. These provisions are designed to capture arrangements that are economically equivalent to land ownership but fall outside traditional dutiable transactions.
This includes complex commercial arrangements, such as profit-sharing agreements, development partnerships, and certain retirement village structures.
Draft DA-067: Economic entitlements – key concepts and interpretation
Draft DA-067 aims to clarify key concepts and interpretations surrounding economic entitlements, particularly where arrangements do not involve a direct transfer of land but still confer financial benefits tied to land ownership. This draft ruling addresses longstanding industry concerns about the breadth and ambiguity of the provisions, particularly in property development and investment arrangements.
DA-067 outlines the Commissioner’s interpretation of key concepts that are relevant to the economic entitlement regime. These have been summarised below.
“Arrangement”
The word ‘arrangement’ is not defined in the Act but has been interpreted in various ways in different statutory contexts. In the current context, the Commissioner will not consider an arrangement to have been made unless there is at least one binding agreement. An arrangement in this context is not used to capture matters that are merely a proposed course of action.
“Is or will be entitled to”
This phrase incorporates an element of futurity about when a person will be entitled to participate or receive an amount under an arrangement. It includes both current and future rights to receive a benefit under an arrangement. It includes direct and indirect entitlements, whether the person is actively involved or passively entitled.
“To participate in”
This is outlined to mean having a right to share in the economic benefits of the land, such as income, rents, profits, capital growth or proceeds from sale of the land.
“Directly or through another person”
This phrase is intended to ‘look through’ participation by a trustee or nominee acting for or on behalf of another person or beneficiary.
DA-067 has been subject to consultation and is expected to be issued in due course.
DA-065: Acquisition of economic entitlements via service fees
DA-065 focuses on when a service fee arrangement may be deemed to confer an economic entitlement, thereby triggering land transfer duty under part 4B of Chapter 2 of the Duties Act.
The economic entitlement provisions provide that a person acquires an economic entitlement if an arrangement is made in relation to land (with an unencumbered value exceeding $1 million) under which a person is or will be entitled to any of the following:
- to participate in the income, rents or profits derived from the land
- to participate in the capital growth of the land
- to participate in the proceeds of sale of the land
- to receive any amount determined by reference to any of the above matters
- to acquire any entitlement described above.
DA-065 provides that in considering whether a service fee amounts to an economic entitlement, the Commissioner will consider the following factors:
- the nature and scale of the arrangement, including the rights, obligations, risk allocation, and responsibilities of the parties to the arrangement. The assumption by a service provider of economic risks associated with the ownership and/or development of land generally indicates that this type of service fee will amount to an economic entitlement.
- the nature and magnitude of the service fee, including whether the substance of the fee is remuneration for identifiable services. For example, the percentage used to calculate the fee is at market rates and the structure of the fee is similar to ordinary fees chargeable by a comparable service provider as remuneration for the identified services. The larger the percentage of an economic benefit of land used to calculate the service fee, the more indicative the service fee will amount to an economic entitlement.
- the nature of the service provider, including whether the service provider ordinarily provides the identified services to third-party recipients within the course of its business.
Examples where the Commissioner wouldn’t consider a service fee to be an economic entitlement include:
- real estate agents commission which are determined by rents or proceeds of sale
- project managers fees which are determined by reference to the proceeds of sale or capital growth of land in exchange for providing project management services to a landowner
- trustees, fund managers, asset managers, and investment managers fees that are determined by reference to the proceeds of sale, rents, profits or capital growth of land under management of the fund.
Retirement villages
DA-065 considers specific circumstances in relation to arrangements involving retirement villages.
Under lease or licence arrangements in retirement villages, a retiree’s right to reside and share in the proceeds from the first resale of their unit is not considered an economic entitlement under Part 4B of the Duties Act, as it is part of their existing lease/licence (which is generally not dutiable). However, this exemption only applies to the first resale, meaning that if the retiree has rights to proceeds from multiple resales, it may be treated as an economic entitlement.
Similarly, payments made by outgoing residents to the retirement village owner are not considered economic entitlements, since the owner already holds full beneficial ownership of the land.
In contrast, non-owners, such as operators who have a right to share in the proceeds of unit sales, are considered to be acquiring an economic entitlement, which must be disclosed to the Commissioner.
DA-066: Calculation of economic entitlements
DA-066 acts as the companion ruling to DA-065 and provides guidance on how to calculate the percentage of beneficial ownership of land taken to be acquired under an economic entitlement.
Percentage of beneficial ownership
Where a person acquires an economic entitlement, the percentage of beneficial ownership of land taken to be acquired will be the total of all the entitlements that the person (or associated persons) is or will be entitled to receive or acquire at the time the arrangement is entered into.
As mentioned above, the relevant entitlements are:
- to participate in the income, rents or profits derived from the land
- to participate in the capital growth of the land
- to participate in the proceeds of sale of the land
- to receive any amount determined by reference to any of the above matters
- to acquire any entitlement described above.
If an arrangement grants a person only one of the above entitlements, clearly defined by a particular percentage, and no additional payments are made to that person or any associated party, the percentage of beneficial ownership deemed to be acquired will be equal to that stated percentage.
Deeming provision
DA-066 also provides a deeming provision that operates to deem the beneficial ownership taken to be acquired to be 100% where the arrangement is entered into:
- does not specify the percentage of the entitlement that the person is or will be entitled to receive or acquire
- in addition to specifying a percentage of the economic entitlement, also includes any other economic entitlement, or amount payable to, the person or an associated person or
- entitles the person or an associated person to 2 or more of the entitlements referred to in section 32XC(1)(b) of the Duties Act.
The deeming provision is subject to the Commissioner’s exercise of discretion, which allows the Commissioner to determine a percentage less than 100% if it is appropriate in the circumstances.
When deciding whether to exercise discretion, the Commissioner will consider all relevant circumstances, including the total economic entitlements held by the person and their associates at the time the arrangement was made.
If the person accurately identifies and quantifies all economic entitlements as less than 100%, the Commissioner may reduce the deemed beneficial ownership from 100% to the actual percentage of entitlements acquired.
Calculation
Once the percentage of beneficial ownership is established, duty is assessed based on that percentage of the land’s unencumbered value at the time the economic entitlement is acquired, not when the associated benefits are eventually received. If the land’s unencumbered value falls between $1 million and $2 million, the duty is gradually phased in using the following formula:
[(A – $1,000,000)/$1,000,000] x B
Where:
- A is the unencumbered value of the relevant land and
- B is the duty that, apart from this section, would be chargeable on the acquisition of the economic entitlement.
How SW can help
These rulings provide greater clarity for developers, investors, and retirement village operators, ensuring compliance with duty obligations and reducing ambiguity around complex land-related arrangements.
Stakeholders should review existing and future arrangements considering the new rulings to ensure compliance and mitigate any risks for duty being imposed.
Please reach out to our dedicated tax specialists to help you interpret the changes, assess your exposure, and ensure your arrangements remain compliant.