Family trust
A discretionary trust where a trustee holds assets, such as investment property, for a group of family beneficiaries.
- Trustee decides how income is distributed each year
- Can offer flexibility and asset protection
- Brings set-up costs, land tax and lending differences
How it works
A trustee, often a company, owns the property on behalf of beneficiaries. Net income can be distributed among beneficiaries each year, within tax rules.
Trade-offs
Trusts can help with asset protection and income splitting, but some states charge land tax with lower or no thresholds for trusts, and rental losses stay inside the trust rather than offsetting personal income.
The right structure depends on your income, family, goals and state. That decision belongs to your accountant or financial adviser before you buy.
Common questions
Can I move a property into a trust later?
Usually only by selling it to the trust, which can trigger stamp duty and CGT.
Can a trust borrow to buy property?
Yes. Many lenders offer loans to trusts, often requiring personal guarantees.
Related terms
Sources
General information only. It does not consider your objectives, financial situation or needs, and is not financial, credit, tax or legal advice. Rules change, so check current law and get advice from a licensed professional before acting.