The ATO has released Draft Practical Compliance Guideline PCG 2026/D2, and it’s very clear where they’re focusing next, property development structures, particularly where land ownership and development activities are split.
This isn’t new territory, but the tone has shifted. The ATO is moving from 'we’re watching' to 'we’re assessing and acting.
The ATO have introduced a two-zone system:
The ATO isn’t trying to stop property development structures. They’re trying to stop tax timing strategies dressed up as commercial arrangements.
If your structure makes sense commercially and your tax follows that, you’re in a strong position. If not, take a proactive approach to fix it rather than waiting until the ATO asks.
If you're in property development and need assistance in understanding the Draft PCG 2026/D2 and how it may impact your operations, contact our experienced team.
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