When it comes to buying property, one of the most overlooked decisions happens long before you choose the suburb or talk to a real estate agent: how should you structure the purchase?
Should the property be in your personal name? Or would it be smarter to buy through a trust or company? The answer isn’t one-size-fits-all. It depends on your goals, your tax position, and your future plans. That’s why this decision should always be made in consultation with your accountant or financial adviser.
Buying in Your Personal Name: Simple and Straightforward
For most first-home buyers and even many investors, buying in their own name is the most common and straightforward option. The process is familiar, lending is easier, and you’ll be eligible for certain tax benefits, such as negative gearing.
Pros:
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Simple setup, no additional legal structures required
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Eligible for individual tax deductions (e.g., interest, depreciation)
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You can access the CGT (Capital Gains Tax) 50% discount after holding the property for more than 12 months
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Easier to borrow money from banks compared to trusts or companies
Cons:
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All income and capital gains are taxed at your personal marginal rate
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The property is part of your personal assets, which can be at risk if you’re sued or go bankrupt
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Not ideal for asset protection or estate planning in more complex situations
This option works well for owner-occupiers, beginner investors, or those with simple tax affairs who want a no-fuss approach.
Buying Through a Trust: Greater Flexibility (With More Complexity)
A trust is a legal structure where a trustee holds the property on behalf of beneficiaries. There are different types of trusts, but the most commonly used for property investment is a discretionary (or family) trust.
Pros:
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Potential for tax benefits through income distribution to family members in lower tax brackets
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Greater asset protection—trust assets are separate from your personal estate
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Useful for estate planning and intergenerational wealth transfer
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Profits can be retained or distributed at the trustee’s discretion
Cons:
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No access to the CGT discount unless it’s a specific type of trust (and set up properly)
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Losses (e.g., from negative gearing) usually stay within the trust—they can’t be offset against your personal income
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Set-up and ongoing accounting costs are higher
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Some lenders are more cautious when it comes to lending to trusts
A trust may be a smart move if you’re building a property portfolio, want long-term flexibility, or are concerned about asset protection. But the benefits only outweigh the costs if you get the structure right—and that’s where accountants Melbourne investors rely on can really help tailor the setup to your goals.
Buying Through a Company: Best for High-Volume or Business Investors
Buying property through a company is another option—especially for developers or business owners who are flipping property or generating higher volumes of investment activity.
Pros:
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Corporate tax rate (generally lower than the top marginal personal tax rate)
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Clear separation between business and personal finances
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Asset protection from personal liabilities
Cons:
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No access to the CGT discount for companies
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Losses are trapped within the company—no offset against personal income
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Additional compliance, reporting, and ASIC obligations
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May complicate lending—banks often require personal guarantees
This structure can work well for people running property investment like a business or using a company as part of a broader investment strategy. But it’s usually not ideal for everyday investors looking to hold one or two properties for passive income.
What Lenders Think About Each Structure
Different ownership structures can affect how much you can borrow and what conditions the lender applies. Banks often favour straightforward personal ownership for simplicity and lower perceived risk.
If you’re borrowing through a trust or company, expect to provide more documentation, possibly pay slightly higher rates, and sometimes offer a personal guarantee. A good mortgage broker can help structure the application for a smoother process, but your accountant should be involved from the beginning.
Tax Isn’t the Only Factor—Think Long-Term
While tax efficiency is important, this decision should also reflect your broader goals. Do you plan to:
Each path has different implications, and the right structure can protect your wealth and provide more control down the track.
Final Thought: Get Advice Before You Sign Anything
Choosing the right ownership structure isn’t something to figure out halfway through a purchase. It should happen before you even apply for finance or make an offer. Changing the ownership structure later can be difficult and expensive—often triggering stamp duty, capital gains tax, or legal fees.
The best step? Sit down with your accountant and lay everything on the table—your goals, your risk appetite, and your plans beyond this property. The right advice upfront can save you money, reduce tax, protect your assets, and support smarter decisions for years to come.
Because in property, it’s not just what you buy that matters—it’s how you own it.