Treasurer Jim Chalmers told a federal Labor caucus meeting on Tuesday that his department is once again pressing state governments to waive stamp duty for individuals and businesses forced to restructure out of discretionary trusts, The Australian Financial Review (AFR) reported. The admission came only five weeks after the Albanese government said it had already solved the problem with an alternative mechanism — one that business groups had panned as unworkable.
The renewed push matters to roughly 490,000 small and medium Australian businesses structured through discretionary trusts, a vehicle commonly used to hold investment property as well as other business assets, now facing a new 30 per cent minimum tax on trust distributions from mid-2028. New South Wales has signalled sympathy for a stamp duty exemption, saying it does not want to profit from a federal tax change, but Queensland and Western Australia — the two states that already apply stamp duty to transfers of business assets beyond real estate, including goodwill, stock, and plant and equipment — remain opposed. Queensland Treasurer David Janetzki said “Queensland will not be paying for Jim Chalmers’ budget decisions,” according to the AFR.
The dispute is the latest turn in the tax-reform package Zagdim covered earlier this week, in reporting on the negative-gearing and capital-gains-tax overhaul already reshaping Australia’s property market. Discretionary trusts are a common structure for holding Australian investment property, so whether restructuring out of one triggers a state stamp duty bill — on top of the new federal trust tax — is a direct cost question for property owners and investors who use trusts, not only for other small businesses.
Chartered Accountants Australia and New Zealand has estimated that a hypothetical Queensland business with $3.5 million in turnover and $1.5 million in value could face restructuring costs of between $29,000 and $104,000, depending on whether the state ultimately applies stamp duty to the restructure, the AFR reported. Shadow Treasurer Tim Wilson called for the government to abandon the trust tax changes altogether, saying insiders were “briefing that the treasurer had no idea about the impacts of his trust laws on small business.” The Greens are separately hardening their opposition to a planned carve-out for charities and community sports clubs from the new tax and plan to refer the bill to a Senate inquiry, the AFR reported. Chalmers told parliament the new rules do not take effect until mid-2028, which he said gives businesses time to restructure; independent reporting by The Australian confirmed on the same day that talks between his department and the states remain ongoing.
References
The Australian Financial Review – Stamp Duty Waiver Back in Play as Trust Tax Backlash Grows
