Master Builders Australia is telling builders to get on the phone to their federal MP over proposed federal changes to trust laws, warning that a small family-owned construction business with taxable income of $400,000 could face tax increases of up to 70 per cent, one-off restructuring costs of between $82,000 and $175,000, and ongoing annual costs of between $21,000 and $67,500.
The call came in a piece by Master Builders Australia chief executive Denita Wawn, published by Sourceable on 17 August 2026. It opens with a blunt warning that “a systemic shock may be about to hit the sector, delivered by the Federal Government”.
Wawn’s argument rests on how the industry is built. The piece says construction is 98 per cent small businesses, and that around 1 in 5 of those small businesses uses a structure involving a trust. On Master Builders’ reading, the proposed changes “will compel many small businesses to restructure”, hitting what the piece calls “long-established and lawful business structures that help builders manage risk in a sector as volatile and cyclical as construction”.
The piece doesn’t name the specific measure, publish a start date, or carry a government response. Builders wanting to weigh it up have the peak body’s numbers and not much else at this stage.
The figures Master Builders is putting on the table
Master Builders Australia estimates a small family-owned construction business with taxable income of $400,000 could face tax increases of up to 70 per cent and one-off restructuring costs of between $82,000 and $175,000, according to analysis published in August 2026.
Put the top of that restructuring range next to the work. For a lot of small residential builders, $175,000 is more margin than a couple of houses will throw off in a good year. It’s money that buys no bricks, no trusses and no labour, and it lands in a market where fixed-price contracts signed twelve months ago are already doing the squeezing.
The ongoing figure matters just as much for anyone running a lean office. Between $21,000 and $67,500 a year, on Master Builders’ numbers, is roughly the cost of a part-time contract administrator you can’t then afford to hire.
The “just restructure as a company” argument
Wawn takes aim at the easy answer. Politicians and bureaucrats might say, “just restructure as a company instead of a trust. Simple.”, she wrote, before knocking it down.
Her response is that swapping structures is nothing like “changing your mobile phone plan”. As she put it: “It can involve lawyers, accountants, banks, insurers, licences and contracts, all of which cost money and ultimately make building more expensive at the worst possible time.”
Elsewhere, the piece says the changes would force small businesses to start “afresh”, “requiring a new license, complex contractual amendments, other regulatory compliances and wiping out business history”.
What actually sits in the entity’s name
That last phrase is the sleeper for anyone on the tools who’s ever had to prove a trading history to get a job.
Run through what’s held by the entity rather than the person. The builder’s licence. Every live head contract and every subcontract sitting under it. The public liability and contract works policies. The bank facility and any bonding. The trade accounts at the timber yard and the plumbing wholesaler. Prequalification with the builders and developers you subcontract to.
Move the business and each of those has to be dealt with one at a time. A fixed-price contract signed by the old entity doesn’t migrate on its own, so a builder halfway through a townhouse job is looking at contractual variations, not a change-of-address form.
Licensing is where it gets messier again, because it’s a state matter. QBCC in Queensland, NSW Fair Trading, and the Victorian Building Authority each set their own requirements for licensing an entity and assessing its financials, a patchwork covered in BCN’s carpentry licence by state guide. Anyone weighing up a restructure needs to ask their own state regulator what happens to a licence, and to any financial reporting history behind it, before the accountant starts drawing boxes.
The four asks
Master Builders isn’t calling for the changes to be dropped outright. It wants them softened, and it’s put four things on the list.
“At a minimum, these changes should be grandfathered. It is not right for the Government to change the rules halfway through the game,” Wawn wrote.
Beyond grandfathering, the piece calls for “a permanent small business carve out”, plus “a full regulatory impact assessment and a review of the definition of discretionary trust”.
Wawn’s closing shot is aimed at the timing: “The big question is why, in the middle of a housing crisis, is the Federal Government making it harder and more expensive to run a building business and build homes?”
“The big question is why, in the middle of a housing crisis, is the Federal Government making it harder and more expensive to run a building business and build homes?”
What to watch
The practical instruction in the piece is simple enough: builders concerned about the changes are urged to contact their local federal MP, with the article pointing to the Australian Electoral Commission’s electorate lookup at electorate.aec.gov.au to find the right one.
The things to keep an eye out for are draft legislation, a start date, and whether either grandfathering or a small business threshold shows up in it. If you’re trading through a trust and you’ve got fixed-price work signed under that entity running into next year, the conversation to book now is with your accountant, not your MP.
Master Builders Australia says it represents more than 32,000 businesses nationally across residential, commercial and civil construction.
Frequently asked questions
What trust law changes is Master Builders Australia worried about?
The peak body hasn’t named a specific measure or start date. It says proposed federal changes to trust laws could raise tax by up to 70 per cent for a small family-owned building business with $400,000 in taxable income, and force many small businesses that use a trust structure to restructure.
How much could restructuring a building business cost?
Master Builders Australia estimates one-off restructuring costs of between $82,000 and $175,000, plus ongoing annual costs of between $21,000 and $67,500, based on its own analysis of a $400,000 taxable income business.
What does moving from a trust to a company structure actually involve?
According to Master Builders chief executive Denita Wawn, it can involve lawyers, accountants, banks, insurers, licences and contracts. The entity’s builder’s licence, contracts, insurance policies, bank facilities and trade accounts all have to be dealt with individually rather than simply transferred.
What is Master Builders Australia asking the federal government to do?
It wants the changes grandfathered, a permanent small business carve-out, a full regulatory impact assessment, and a review of the definition of a discretionary trust. It’s also urging builders to contact their local federal MP.
Sourced from Sourceable, Master Builders Australia. Original article.
