My Name, A Trust Or A Company
Should You Buy Your Investment Property in Your Name, a Trust, or a Company?
When you’re ready to buy an investment property in Australia, there’s a big question you need to answer: How should you own it?
Most people just buy in their own name because it’s simple. But is simple always best? The way you choose to own your investment property can make a big difference to:
- How much tax you pay
- How safe your property is from problems
- How easy it is to pass it on to your kids one day
- How much flexibility you have
Let’s look at the three main ways to buy investment property in Australia and help you figure out which one might work best for you.
Buying in Your Personal Name
This is the way most first-time property investors buy. You just buy the property as yourself. Easy!
The Good Things
It’s Simple
There’s not much paperwork, it’s easy to understand, and you don’t need to set up anything special. Just you buying a property.
You Can Save on Capital Gains Tax
If you keep the property for more than 12 months and then sell it, you might only pay tax on half the profit. This is called the 50% capital gains tax discount and it can save you a lot of money.
Negative Gearing Can Help You
If your property costs more to run than the rent you get (which happens a lot in the early years), you can use those losses to reduce your other income. This means you might pay less tax on your job income.
Easy to Get a Loan
Banks are used to lending money to people buying in their own name. The process is straightforward and usually faster.
The Not-So-Good Things
Your Property Isn’t Protected
If something bad happens like you get sued or go bankrupt, people can come after your investment property because it’s in your name. It’s part of your personal stuff.
Your Tax Rate Might Be High
All the rent you get is added to your other income. If you earn good money from your job, you could be paying a lot of tax on your rental income (up to 45% for high earners).
It’s Harder to Plan for the Future
When you want to pass the property to your kids, it goes through your will. This can take time, cost money (probate fees), and sometimes causes family arguments.
You’re On Your Own
Everything about managing the property and paying for it is all on you. There’s no flexibility to spread things around.
Buying Through a Family Trust
A trust is like a special arrangement where the property is owned “for the benefit of” your family members. It’s more complicated but gives you more options.
The Good Things
Your Property is More Protected
Because the property isn’t in your personal name, it’s harder for people to take it if you have legal or money problems. The trust owns it, not you personally.
You Can Be Smart with Tax
A trust can give the rental income to different family members. You might give income to family members who earn less money and pay less tax. This can save your family thousands of dollars in tax each year.
Great for Passing Property On
The property doesn’t have to go through your will. The trust can keep going and your kids can benefit from it without dealing with probate or estate battles.
Lasts Forever
Unlike people, trusts don’t “die.” Your property investment can keep going for many generations in your family.
The Not-So-Good Things
It Costs More to Set Up and Run
You’ll need to pay a lawyer to set it up (usually $1,500 to $3,000) and then pay for annual tax returns and accounting fees. It’s an ongoing cost.
You Can’t Use Negative Gearing the Same Way
If the property makes a loss, you can’t use it to reduce your personal income like you can when you own it yourself. The loss stays in the trust.
It’s More Complicated
You need to keep proper records, have meetings, and follow trust rules. It’s not as simple as owning property yourself.
No Tax Discount for Your Main Home
If you wanted to live in the property, you can’t claim it as your main home and get the capital gains tax exemption.
Banks Can Be Tricky
Some banks charge higher interest rates for trust loans, and getting approved can be more difficult.
Buying Through a Company
This means setting up a company that owns the property. It’s like the property belongs to a business, not a person.
The Good Things
Good Protection for Your Personal Stuff
Like a trust, the company owns the property. Your personal assets are separate and safer from business problems.
The Tax Rate is Fixed
Companies pay 30% tax (or 25% for small businesses). If you’re a high-income earner paying 45% tax, this could save you money. Tax Calculator
Good for Business Partners
If you’re buying investment property with friends or business partners, a company makes it clear who owns what and how profits are shared.
Professional Structure
It can be easier to do business, get commercial property, or build a bigger portfolio with a company structure.
The Not-So-Good Things
No Capital Gains Tax Discount
When you sell the property, companies don’t get the 50% discount that individuals get. You pay tax on all the profit, which can be expensive.
You Can’t Use Negative Gearing
Like trusts, company losses can’t reduce your personal income. They can only reduce other company income.
More Costs and Paperwork
Companies need annual reports, ASIC fees, proper financial statements, and company tax returns. It all adds up in time and money.
Taking Money Out Can Cost You
When you want to take profits out of the company, you might pay extra tax (called dividend tax) on top of the company tax already paid.
Banks Might Charge More
Some lenders see company borrowers as higher risk and charge higher interest rates.
So Which One Should You Choose?
Here are some questions to help you decide:
How much money do you earn?
If you’re a high earner (over $120,000), a trust or company might save you tax by giving income to lower-earning family members. If you earn less, owning in your name might be simpler and better.
Do you have a risky job or business?
Doctors, business owners, and people in jobs where they might get sued should think about a trust or company for better protection.
How many properties do you want to own?
If you’re planning to buy just one property, keeping it simple in your name often makes sense. If you want to build a big portfolio, a trust or a company might help you grow.
Do you want to pay off the loan quickly?
If you want to make extra payments and pay off your loan fast, a variable-rate loan in your name is usually the best option.
What are your long-term plans?
If you want to pass wealth to your kids or keep the property in the family for years, a trust or company might be worth considering.
How do you feel about paperwork?
If you hate dealing with complicated stuff, buying in your name is the simplest path.
What Most Investors Do
Here’s what we see at Awesome Lending Solutions:
First-time investors usually buy in their own name. It’s simple, they get the tax benefits of negative gearing, and they’re learning how property investment works.
Experienced investors with 2-3+ properties often use a trust for new purchases. They’re thinking about tax savings and protecting what they’ve built.
Business people and high-income earners are more likely to use trusts or companies because the extra costs are worth it for the protection and tax benefits.
Split Strategy – Can You Do Both?
Yes! Some investors use a mix:
- Keep their first investment property in their own name (simple and good for negative gearing)
- Buy future properties in a trust or company (for protection and tax planning)
This way, you get the best of both worlds.
Getting the Right Advice Matters
This decision is important and can affect you for many years. The structure that’s perfect for your friend might not be right for you.
Things that matter:
- Your income now and in the future
- Your family situation
- Your job and how risky it is
- Your plans for the property (sell in 5 years or keep for 30?)
- Other assets you own
- Your age and retirement plans
What About Getting a Loan?
The structure you choose also affects your loan:
Personal Name:
- Usually the easiest to get approved
- More lenders to choose from
- Better interest rates
- Simpler application process
Trust:
- Fewer lenders work with trusts
- Might pay a bit more in interest
- More paperwork needed
- Some lenders want personal guarantees
Company:
- Even fewer lenders offer company loans
- Usually higher interest rates
- Need to show company financials
- Directors often need to personally guarantee the loan
Don’t Forget These Costs
Whichever way you choose, remember these expenses:
Personal Name:
- Stamp duty
- Conveyancing fees
- Loan costs
- Building and pest inspections
- Annual property management and maintenance
Trust:
- All the above PLUS
- Trust setup fees ($1,500-$3,000)
- Annual accounting fees ($800-$2,000)
- Higher lending costs
Company:
- All the above PLUS
- Company registration ($500+)
- ASIC annual fees ($290+)
- Annual company tax returns
- More complex accounting fees ($1,500-$3,000+)
Common Questions We Get
Can I change the structure later?
Yes, but it usually means “selling” the property from yourself to the trust/company. This triggers stamp duty and possibly capital gains tax. It’s expensive to change, so it’s better to get it right from the start.
What if I want to live in the investment property later?
If it’s in your name, you can move in and claim it as your main home (no capital gains tax when you sell). If it’s in a trust or company, you can’t do this.
Do I need a financial advisor?
For most first-time investors buying in their own name, probably not. But if you’re considering a trust or company, it’s smart to talk to an accountant who understands property investment.
What structure do you recommend?
We can’t give you tax advice (we’re mortgage brokers, not accountants), but we can explain the lending side and connect you with good property accountants who can help you decide.
Our Final Thoughts
For most Australians buying their first investment property, buying in your own name makes sense. It’s simple, you get good tax benefits, and you can focus on learning about property investment without extra complexity.
As your property portfolio grows and your income increases, then it might be time to think about using a trust or company for future purchases.
The most important thing is to make a choice that:
- Fits your current situation
- Helps you reach your investment goals
- Gives you peace of mind
- Doesn’t cost more than it saves you
Ready to Buy Your Investment Property?
At Awesome Lending Solutions, we help investors like you every day. Whether you’re buying in your own name, through a trust, or in a company, we can:
- Find you the right lender
- Get you a great interest rate
- Make the loan process simple
- Answer all your questions
We work with investors in Sydney and across Australia, and we know which lenders work best for each type of ownership structure.
Want to chat about your investment property plans? Book a free consultation and let’s work out the best path for you.
Remember, buying your first investment property is a big step toward building wealth. Take the time to understand your options, get good advice, and make a decision that sets you up for long-term success