Buying property through a trust: compare the costs before you sign

Give your solicitor, accountant and broker the same purchase details. You want the ownership advice, tax figures and loan application to work together.

Start with what you want the trust to do. You might want a say in who benefits from the property or who takes over when you can no longer manage it.

Who should benefit from the property? Who should make decisions? What happens if someone dies or loses capacity, and who can replace the trustee?

The trustee holds the property, the beneficiaries can benefit under the trust and the deed sets the rules. In a discretionary trust, the trustee decides distributions within those rules.

Fixed or unit arrangements work differently. A corporate trustee is a company acting as trustee. That isn't the same as the company buying a property for itself.

Ask a solicitor what protection the structure can realistically provide. A trust doesn't guarantee protection against creditors, relationship claims or commitments you make personally as a guarantor.

Ask what it will cost to set up and run each year. Include advice, accounts, tax returns and any corporate-trustee costs in your property budget. A trust can be complex and expensive even if a person, rather than a company, is the trustee.

Have your accountant model the rental profit or loss, land tax and eventual sale. A trust's tax loss can't pass to beneficiaries to reduce their wage income.

Ask whether and when the trust could use that loss in a later year.

Ordinary trustees generally reach the land-tax threshold at $350k of taxable land, compared with $600k for an individual at ordinary rates. Special rules and exemptions can apply.

Don't use a personal-ownership calculator to estimate a trust's bill.

A minimum tax on discretionary trusts has been proposed from 1 July 2028, but the two related Bills are not law. Don't rely on that future tax outcome when choosing the buyer.

Have your accountant check the current status, exclusions and transition provisions first. Residential investment tax changes need a separate review too. An old article promising automatic tax savings isn't a sound basis for choosing today's buyer.

Check that a lender will consider the purchase before you pay to set up the trust or commit to the property. The deposit, rate and paperwork may differ from a loan in your own name. The lender needs to accept the trust, its trustee and the purchase.

A company acting as trustee belongs in the trust assessment, not automatically in the last row. Compare the legal and tax effects with your advisers as well as the borrowing.

A person acting as trustee and a company acting as trustee may go through different lending assessments. Find out which team would handle your application before using the bank's advertised home-loan rates in your budget.

Macquarie stopped new home lending to trusts and companies, so don't assume a loan available in your own name will also work for your trustee. Our Macquarie home loan review covers the broader offering, but the proposed borrower needs a separate check.

Trust lending can need a bigger deposit than buying in your own name. The loan-to-value ratio (LVR) is the loan as a percentage of the lender's accepted property value. A 70% limit means you need at least 30% from your own funds or eligible equity. At 80%, that falls to 20%.

For a $1m purchase valued by the lender at $1m, 70% LVR means a maximum $700k loan and a $300k contribution. At 80%, that is an $800k loan and $200k contribution. You still need to cover stamp duty, legal fees and other purchase costs. If the lender's valuation is lower than the price, the cash gap grows.

These are maximum LVRs for the specified borrowers, not approval. The lender still has to accept your trust, property and application.

*Minimum contribution before purchase costs, assuming the lender's valuation matches the price. We confirm the exact product, property and trust structure before relying on any limit.

A $200k deposit may fit an 80% lender on a $1m property but fall $100k short at a 70% lender, before costs. We check the deposit against the trust-specific limit first, then compare rates, guarantees and borrowing power. Read our ANZ home loan review and NAB home loan review, or ask us to check your trust borrowing options.

Bring the deed and trustee details before comparing rates. The same trust can fit one lender and fail another's trustee, guarantee or existing-customer rules.

Tell us if the CBA lending relationship you want to rely on is held through another entity. Home, business, asset-finance and personal loans, or a credit card, can qualify. If another non-trading entity holds that facility, each guarantor whose income supports the trust loan must also be its director and shareholder. Self-employed applicants relying on a company facility also face majority-shareholding requirements for all those guarantors. We check those ownership links before assuming one person's CBA account is enough.

If a beneficiary will live in the property permanently or from time to time, CBA may consider an owner-occupied trust loan. That route requires the trustee to claim no rental income, tax deductibility or negative gearing from the property. Other scenarios use investment lending. Have your accountant check whether that fits the intended tax treatment and your solicitor explain the guarantees.

Check the borrowing structure before shopping for a rate. A trust accepted by one bank may fail another bank's trustee, deposit or existing-customer rules. We start with those gates so you don't build a purchase budget around a loan you cannot use.

We start with the trust deed, trustee details and what you want to buy. We check which lenders will accept the structure, who must guarantee and how they assess income and existing debts.

Then we compare the deposit, repayments and fees on the options that fit. If you want an offset, interest only or equity for another purchase later, we check those features for the trust borrower too.

This matters if your plan depends on borrowing against the property again. A lender may accept the purchase but restrict cash out or changes to the trustee. Finding that out before you apply can save you from choosing a loan that blocks the next step.

Get a free trust-loan assessment with Hunter Galloway before you commit to the property. We can check the lending options while your accountant and solicitor advise on ownership, tax and legal consequences. Lender acceptance remains dependent on your application and current policy.

Get the lender's document list early. It may need the trust deed and any amendments, trustee identification or company details, financial records and information about the purchase and expected rent.

Ask who needs to support the application and whether anyone must guarantee the loan. Have your solicitor independently explain what signing a guarantee would mean for you.

If your budget relies on a lenders mortgage insurance waiver, check whether the proposed trustee borrower qualifies. Lenders mortgage insurance protects the lender, not you.

Receiving trust distributions while buying personally is a different question. Our trust income home loan guide explains how that income can be assessed. It doesn't establish loan approval for a trustee purchasing property.

Before you commit:

1. Explain why you want trust ownership and how long you expect to hold the property.
2. Get a written tax and cost comparison with personal ownership.
3. Check lender acceptance of the proposed structure and deposit.
4. Have your solicitor check the purchaser wording, trustee powers and contract conditions before signing.
5. Then finalise the structure and finance application.

Our investment property loan guide helps with the finance side. It doesn't replace the legal or tax advice.

Changing the buyer later can create extra costs. Moving an existing property into a trust can involve duty, capital gains tax, legal work and loan changes.

Add those costs together before deciding. Moving the property into a trust changes its ownership.