The 30% Trust Tax Bill Is Due in Parliament Today. Before Any Builder Restructures, Check What It Does to Your Licence and Home Warranty Cover.

The trust tax bill reaches Parliament

Treasurer Jim Chalmers is due to introduce legislation for the 30 per cent minimum tax on discretionary trusts in Parliament today, Wednesday 14 October 2026, the ABC reported this morning. The Coalition opposes the tax, so Labor needs the Greens to pass it in the Senate. On Tuesday the Greens called for a Senate inquiry into the bill.

The measure was announced in the May Budget and is not yet law. Under the plan, the minimum tax would start on 1 July 2028, and roll-over relief for trusts that want to restructure would be available for three years from 1 July 2027.

For builders this matters more than for most small businesses. HIA Managing Director Jocelyn Martin said on 12 October that "around three in five HIA members operate through a family trust", in a release that pointed to the trust proposals due before Parliament this week.

This article summarises government statements, industry submissions and published reporting. It is not tax, legal or financial advice. The bill as introduced may differ from the draft. Talk to your accountant or tax adviser about your own structure.

What the Government has proposed

The Treasurer's 3 September release on the exposure draft set out how the tax would work.

| Item | What the Government has said | | --- | --- | | The tax | A 30% minimum tax on discretionary trust income, applied at the trustee level, from 1 July 2028. Non-corporate beneficiaries get a non-refundable credit for tax the trustee pays (ATO) | | Option 1: restructure | Expanded roll-over relief for three years from 1 July 2027 to move assets out of a discretionary trust into other structures | | Option 2: stay put | An election to make fixed distributions to pre-nominated beneficiaries, which the Government says would not need a restructure and is not expected to trigger state stamp duty | | Exclusions | Charitable trusts, special disability trusts, super funds, primary production income, deceased estates and genuine testamentary trusts, among others | | Who is affected | "Less than 10 per cent" of Australia's 2.7 million active small businesses in any given year |

The ABC reported that the Government estimates 350,000 active small businesses used discretionary trusts in 2022–23, and that Treasury analysis suggests 140,000 of those would not need to pay the new tax. The Government expects the tax to raise $4.5 billion in its first year.

What builders' groups say it costs

Master Builders Australia says around one in five small businesses in building and construction use a structure that involves a trust. Its analysis found a small family construction business with taxable income of $400,000 could face:

• tax increases of up to 70 per cent
• one-off restructuring costs of $82,000 to $175,000
• ongoing annual costs of $21,000 to $67,500.

Master Builders said the draft's fixed-distribution option may avoid restructuring costs, but would "permanently strip away much of the flexibility" of the structure. It would also stop a business adding a spouse, child or business partner later, and lock in income and capital percentages every year. It wants existing structures grandfathered, which it says "would spare almost 90,000 small and family builders", plus a permanent small business carve-out (4 September statement).

The part builders can't see on a tax return

HIA's submission to Treasury (31 July 2026) raises a risk that goes beyond tax. Home warranty eligibility, licences and construction limits are generally tied to the entity that holds the licence and signs the contract. Roll-over relief, HIA says, "does not necessarily preserve the insurance eligibility, licence, financial history or construction limits held by the existing building entity."

HIA lists what a restructured building business may need to do:

• obtain or amend its builder licence or registration
• apply for a new or revised insurance eligibility profile
• provide new financial statements
• show that enough assets and working capital sit in, or are available to, the new entity
• replace guarantees, indemnities or securities
• transfer or novate existing contracts, and confirm current and future jobs remain insured.

HIA notes the rules differ by state. In Victoria, Minimum Financial Requirements and a Maximum Construction Capacity have applied to domestic builders since 1 July 2026. In Queensland, licensees must continuously meet QBCC Minimum Financial Requirements, and trust structures must provide financial information for both the trust and the trustee.

What it means for the builder's desk

• Confirm what structure you actually run. Ask your accountant whether your building business, or the entity that holds your licence, is a discretionary trust, and whether it is likely to pay more under the 30% minimum.
• Model both options before you move. Compare the cost of restructuring under roll-over relief with the fixed-distribution election, including what you would give up in flexibility.
• Put your licence and warranty insurer in the plan. Any change to the contracting entity can affect licence, home warranty eligibility and construction limits. Talk to your regulator and warranty provider before you restructure, not after.
• Don't rush. The bill still has to pass the Senate, may go to an inquiry and could change. Roll-over relief would not open until 1 July 2027.
• Watch the timing on live jobs. If you do restructure later, plan around open contracts, progress claims and guarantees so work in progress stays insured.

Sources: ABC News, Greens concerned private school fees paid out of trusts could escape Labor's 30pc tax (14 October 2026); Treasurer Jim Chalmers, Exposure draft legislation – Minimum tax on discretionary trusts (3 September 2026); Treasury, Exposure draft: Treasury Laws Amendment Bill 2026: Minimum tax on discretionary trusts; ATO, Tax reform – introducing a minimum tax on discretionary trusts; HIA, Come walk a day in the shoes of small business (12 October 2026); HIA submission, Minimum tax on discretionary trusts (31 July 2026); Master Builders Australia, Builders are being boxed into a no-win situation (August 2026); Master Builders Australia, Draft trust legislation still a hammer blow to small builders (4 September 2026).