Family trust, first house and planning a second.

Hello all my first post.

I have recently setup a family trust mainly to house my shares.

I brought my first house mid last year in my own name. I am looking to move it into my trust after 12 months of ownership.

I am planning on turning it into a rental and buying another house to live in.

I have own 50% of the property outright and have also gained another 30-40k in value from work i have been doing ( new bathrooms, laundrys, patios ect)
So there is around $200k equity currently.

Is it best to keep the properties in my name our house them in the trust?

i do plan to buy a couple more properties in the future.

 

Why do you want to put the property into a family trust? State?

 

If you sell your family home to your family trust you will likely pay stamp duty (in WA at least).

You are also likely to lose the main residence exemption on the family home held by the trust.

Some states apply a higher rate of land tax.

Your issues should be done under consideration of structuring your succession, asset protection and admin costs.

There is more at stake to your q than tax.

 

The reason is for future planning and asset protection. It wont be a family home in 6-8months so i am looking at the best options.

I am in Western Australia

 

Get some legal advice as many consequences on how you get it into the trust. You might also be better off with not using the same trust as the shares.

 

I recommend you do a cashflow forecast to see how long a payback the tax benefits of a trust are. The asset protection risk is real but varies significantly depending on your risk from your business, family or employment.

If you sell to a trust you have some opportunities to ensure your loans are maximised for deductible debt.

I think a long term plan will be appropriate to understand the best structuring alternatives.

 

WA does not apply a higher land tax rate to property held in a trust structure.