Structuring of finances and properties- Trusts or own names?

we're speaking to a good accountant who is into property soon about how to structure our finances as we get into IP.

i was wondering if people had any general comments/opinions about to have IP in our own names or trusts? The first IP will probably be in QLD. we're in NSW. I know there is no right/wrong with this, and to seek professional help. just after some opinions.

 

Structuring ownership? Or using trusts in related party borrowing strategies?

Better speak to a solicitor for the structuring aspects.

 

The question is what would you be trying to achieve by purchasing via a trust? There certainly are good reasons to do this, but these tend to be tailored to specific circumstances.

 

Just note that from a finance/borrowing capacity perspective - it potentially hurts your servicing if you purchase a property under a Trust w/ a Corporate Trustee vs purchasing under an individual name.

 

I'm with Shahin on this. I have supported and advocated trusts strategies for years. In many cases where borrowings are involved they are now complicated by:
- Issues that limit unit trusts to a very small number of lenders and even then some of these lenders refuse to lend to anyone other than the trustee. Quarantined losses can and will occur without adequate planning.
- Issues with servicing and the inability to access equity release as easily as personal ownership
- Servicing calcs where a corporate trustee is used.. The recent APRA changes are changing the playing field.
- Risks if human trustees are used
No better example of seeking personal advice before acting.

Many people argue a good strategy is to have a heap of different trusts in QLD each with one or two IPs to get multiple Land tax thresholds. Even that strategy has dire risks and may be incorrect.

Careful reading well regarded publications such as Trust Magic etc. These publications do not reflect current lending practices and may well be outdated or not consider current lending policies. If you are contemplating a trust also seek a great broker who knows the market for trust loans.

 

It will included whose names we own the IP in (joint peronally, or in a trust). and also how this will affect us being able to use equity from the IP over time etc.

 

Very helpful. would there be major benefits of trusts to outweigh the above

 

You need legal advice.