New research reveals that despite 75% of property investors reporting that they will lodge their return through an accountant this year, many are still feeling stressed at tax time.
Research from fintech start-up TaxTank shows that 40% of Australian property investors feel uncertain, stressed, overwhelmed, out of control or are filled with dread at the thought of doing their taxes.
When it comes to cost, the majority (30%) spend between $251 and $500 on managing their taxes, but this increases significantly for investors with larger portfolios. In fact 28% of investors spend more than $500 on their tax management and investors with four properties or more were twice as likely to spend over $1500 than other investors in the study.
Commenting on the research, TaxTank founder Nicole Kelly said, “When listing their top three concerns about tax time, 42% of property investors cite the cost of doing their taxes as the most stressful. This is closely followed by missing out on deductions and complicated tax rules. To me, this suggests a disconnect between the role of an accountant and the perceived value to individuals. If this isn’t addressed it may amplify the growing number of investors opting to self-lodge through MyTax.”
With the ATO working towards a clear agenda of tax time automation, the accounting industry landscape is set to undergo some changes. According to ATO data, 34% of taxpayers lodged through MyTax last financial year, up 5% from the previous year.
“According to our recent surveys, this upward trend is set to continue. To gain a better understanding of how different categories of taxpayers lodged their returns we commissioned a survey of just property investors. Of those surveyed, 75% indicated they would use a tax accountant this financial year, which shows loyalty towards the industry, however the associated stressors are an eye opener that should not be ignored,” stated Nicole.
“There is no stopping automation, but that’s certainly not all bad. TaxTank is dedicated to bridging the gap between individuals wanting to self-manage and firms delivering a more efficient and cost-effective service that reduces costs and repositions accountants as the trusted advisor all year round.”
With 62% of property investors only managing their taxes during a once-off period, and 49% not confident they’re claiming all deductions, there’s an opportunity to redefine tax management for the modern age.
“Tax should not be a once a year event, and neither should the role of an accountant for individuals in the digital age,” stressed Nicole.
Property investor loyalty is certainly a stronghold for the accounting profession but it shouldn’t be taken for granted. Automated processes are growing in popularity and firms will need to stay ahead of the curve to modernise and retain clients, especially as the ATO expends millions improving MyTax functionality with its sights firmly set on a broader range of taxpayers.
About the survey
The survey was commissioned by TaxTank and undertaken by Octopus Group to analyse the behaviours and sentiments of Australian property investors ahead of the 2022 tax season. In May 2022, Octopus Group conducted an online quantitative survey of 606 Australian property investors. The survey is nationally representative.