Government’s trust changes a systemic threat to construction industry

30 July 2026

Builders have serious concerns about the practical implications of the Federal Budget’s proposed changes to trusts, particularly the risks to asset protection and the inability of businesses to realistically transition out of existing structures.

Around 20 per cent of building and construction businesses rely on trust structures, with the vast majority of these being small businesses.

The peak body for the building and construction industry Master Builders Australia has criticised the Government for failing to recognise how trusts are used as a critical risk management tool and for underestimating the real-world consequences of forcing business restructures without adequate transition arrangements.

CEO Denita Wawn says the proposed 30 per cent trust tax ignores the fundamental role trusts play in protecting small business owners operating in one of the economy’s most volatile and high-risk industries.

“Trust structures are not a tax loophole, they are a long-established way for small builders to protect their assets in an industry exposed to insolvency, legal disputes and significant financial risk.

“Small businesses operate with thinner cash buffers, face significant income volatility, and carry substantial commercial risk. Trust structures help them manage that risk and protect both their livelihoods and their families.

“This is not just a case of simply restructuring out of trusts. The Government’s proposal fails to reflect commercial reality, and the very real barriers businesses face in trying to change structures.

“The proposed rollover relief does not address the true cost and complexity of transitioning out of trusts,” said Ms Wawn.

Consequences of restructuring that the Government’s proposed rollover relief does not cover include exposure to stamp duty, contract and lease renegotiations, lending and refinancing approvals, licensing and registration changes, impacts to credit ratings, and shifts in insurance coverage, among others.

“Undermining these protections without a practical transition pathway risks destabilising thousands of small builders and the projects they deliver. With around 20 per cent of the sector affected, we are talking about a systemic threat to the industry,” said Ms Wawn.

Media contact: Dylan Hafey, Adviser, Media & Government Relations

0497 330 064 | dylan.hafey@masterbuilders.com.au