Buying land with a trust

Hi everyone!

Just a quick question. I am hoping to buy some land through my family trust to build on and rent out. I do not plan on keeping the land vacant. I asked my mortgage broker to look for loans for this and he said that the bank will not allow me to borrow for land if it is bought through a trust. They may consider it if the building plans are complete.

I just wanted to get everyone's view on this - is this generally the case for all banks? Is there any way around it or is this industry practice.

Thanks!

 

I think you need a new broker. There are banks that allow this as I've done it myself.

 

Maybe broker should have said, deal size for just land is too small for me to be bothered doing it. Look elsewhere

 

Thanks for the quick reply guys. Yeah the cost was pretty low so maybe it wasn't worth doing for her.

Can you suggest any brokers in the Melbourne area?

 

I can assure you it is quite possible to fund vacant land and later construction through a trust. We submitted an application on behalf of a client for exactly this last weekend.

 

When buying in a trust there are many issues that impact. Land tax, income tax, asset protection, how losses are quarantined, extra costs etc.

Fewer lenders and different lending rules are a further issue. You can even encounter some lenders who will lend to a company trustee but not a human trustee or a different LVR applies. Some wont do land and constructs and others do. Some lenders wont do trust loans. A good broker helps

 

@Peter_Tersteeg