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Buying property is one of the larger financial decisions most people make, and the question of how to hold the title is more consequential than it can look at the time. Trusts are often presented as the obvious choice for investors, with asset protection, tax flexibility, and smarter estate planning held up as the headline benefits. Sometimes that's exactly right. But in NSW, the tax landscape around buying property in a trust has shifted significantly, and a structure that made sense a decade ago may not stack up the same way today.
Buying property is one of the larger financial decisions most people make, and the question of how to hold the title is more consequential than it can look at the time. Trusts are often presented as the obvious choice for investors, with asset protection, tax flexibility, and smarter estate planning held up as the headline benefits. Sometimes that's exactly right. But in NSW, the tax landscape around buying property in a trust has shifted significantly, and a structure that made sense a decade ago may not stack up the same way today.
This guide works through what each option actually involves, the NSW-specific tax considerations that affect the decision, and the factors that point toward one structure over the other. The aim is to make sure you understand what you're deciding before you commit.
What's the decision? Whether to purchase investment property in your own name, jointly with a partner or family member, or through a trust structure (usually a discretionary or unit trust).
When does it matter? At the point of purchase. Restructuring later triggers stamp duty and CGT as if you're selling and rebuying the asset.
Key insight: Trusts offer real benefits for some investors, but in NSW the land tax, CGT, and liability trade-offs are significant enough that the structure needs to work for your specific situation, not just in general terms.
Why professional advice matters: The right answer depends on your property goals, family circumstances, existing asset base, and long-term plans, and those factors interact differently for each investor.
Think through what you're actually trying to achieve before focusing on structure. Asset protection, income distribution, estate planning, and tax minimisation are legitimate goals, but they don't all point to the same answer. Borrowing capacity matters too, because lenders treat trust borrowing differently to individual lending. And think about your longer-term plans: adding properties, passing assets to children, or eventually selling will all shape which structure makes sense at the start.
Most investors start thinking about trusts after an accountant conversation, an online article, or hearing that "smart money buys in trusts." A trust creates a layer between you and the asset, can distribute income to lower-earning family members, and is common in estate planning. What's less discussed is that NSW property sits at the intersection of stamp duty, land tax, CGT, and borrowing, and trusts interact with all four differently. Because restructuring after purchase is treated as a new transaction for duty and CGT, it's worth getting clear on this before exchange.
Buying in your own name is the simplest structure. You hold the property on the title, you're entitled to the NSW land tax threshold as an individual, and if it's your primary residence the main residence CGT exemption applies. For investment property, you currently receive the 50% CGT discount if you hold for more than 12 months (subject to the 2026 budget changes covered below), and negative gearing losses flow directly to your personal tax return.
The trade-off is exposure. If you're in a business carrying liability risk, the property sits within reach of creditors, which is why some investors with active trading entities also look at business structuring and ownership at the same time. There's also no income-splitting flexibility, because rental income is assessed in your hands at your marginal rate.
Buying through a discretionary trust (the most common property investment trust) means the trustee holds legal title and distributes income among beneficiaries, typically family members, at the trustee's discretion each year. The flexibility to direct income to whoever is on a lower marginal rate is the main attraction.
The NSW-specific considerations are where it gets nuanced. Discretionary trusts don't receive the NSW land tax threshold that individuals do. They're assessed on the full unthreshold land value, which adds a meaningful annual cost as a portfolio grows. Trusts also can't access the main residence CGT exemption, and the 50% CGT discount (while available for now) flows to individual beneficiaries rather than being captured at the trust level.
Unit trusts work differently: unit holders' entitlements to income and capital are locked to their unit holdings rather than reallocated each year by the trustee. That certainty makes them common in commercial property purchases or where business partners co-invest, but removes the income-splitting flexibility that makes discretionary trusts attractive. Where overseas residents or companies sit in the beneficiary class of any trust, additional NSW duty surcharges apply. And if the trust is intended to hold property through an SMSF, there are limitations on the trust types you can use.
On liability protection, the spectrum runs from most exposed (individual or joint ownership in your own name) to most insulated (a discretionary trust with a corporate trustee, where the company is on title and you sit behind it). An individual trustee is still personally liable for trust debts, which is why most asset-protection structures use a corporate trustee. Companies as an ownership vehicle shield you from operational liabilities but lose the CGT discount and bring their own ongoing compliance cost. Asset protection in any structure is also conduct-dependent: trusts funded shortly before financial stress, or where the original owner controls the trust entirely, can be challenged.
Two changes announced in the May 2026 federal budget affect how the trust-vs-own-name analysis plays out, particularly for investors deciding now and holding past 2027.
First, the 50% CGT discount on assets held more than 12 months is being replaced from 1 July 2027 with an inflation-indexed framework and a minimum 30% tax on the gain. Gains realised before that date keep the existing discount. Investors in newly built dwellings will be able to choose between the old discount and the new regime.
Second, negative gearing on established residential investment properties bought after 7:30pm AEST on 12 May 2026 is being quarantined from 1 July 2027. Losses on those properties will only offset other residential property income, not your wages or salary. New builds remain exempt and keep full negative gearing. Commercial property is unaffected by both changes.
Both reforms are still being legislated and the detail can shift. If you're making a structure decision now and plan to hold past 2027, the modelling needs to reflect these rules, not the ones that have applied for the last decade.
Neither structure is universally better. The deciding question is how the factors interact in your particular situation.
Land tax is often the deciding consideration for NSW investors. If you're building a portfolio of two or more properties, the absence of a land tax threshold in a discretionary trust adds a real annual cost. For a single property with modest land value, it's less significant. For a growing Sydney portfolio (including the Northern Beaches where land values are substantial) it can shift the cost-benefit calculation considerably.
The CGT comparison is more nuanced than it first appears, and now needs to account for the 2026 budget changes. Individual ownership generally produces a cleaner outcome for long-term hold-and-sell strategies. Trusts can still access the current 50% discount for gains realised before 1 July 2027, but it flows through to beneficiaries, creating complexity around who receives it.
Asset protection is real but not absolute. A well-structured trust does create a layer between you and the asset, but lenders often require personal guarantees for trust borrowing, which partially erodes the protection. Lenders can also be less flexible with trust lending, which is worth factoring in if your borrowing capacity is close to its limit.
Estate planning is an area where trusts shine for some investors. Assets held in a trust don't automatically form part of your estate, which can be useful in blended family situations or where you want to control how assets pass to the next generation. A well-drafted will can achieve similar outcomes through personal ownership, but the mechanics are different.
A common misconception is that trusts can be set up now and restructured later if they don't work out. The restructuring cost (stamp duty on market value plus CGT on any gain) means changing course after purchase is often prohibitively expensive. The structure you choose at the start tends to be the structure you keep.
Consider an investor purchasing a freestanding house in Sydney's Northern Beaches for $1.8 million, with land value around $900,000. Buying in their own name keeps them below the NSW land tax threshold. Buying through a discretionary trust means land tax applies to the full $900,000 from year one. Add a second investment property later, and the individual owner still has threshold room. The trust is assessed on the combined land value with no relief.
The trust may still make sense if income splitting produces meaningful tax savings, or if asset protection is a priority given the investor's business circumstances. But the land tax cost needs to be part of the calculation, and the CGT and negative gearing implications need separate modelling against the post-July-2027 framework if the investor is buying now and holding long term.
Getting structure right before purchase is one of those decisions where the upfront investment in advice pays for itself, not because the analysis is complicated but because reversing course later is expensive.
I work with property investors and buyers on residential property transactions to think through which structure makes sense given your existing asset base, your borrowing position, your family situation, and what you're hoping to achieve over time. Where tax advice from an accountant is also needed, I'll tell you that clearly. My background in property investment decisions on the development side means I'm looking at the commercial picture as well as the legal mechanics, which tends to produce more practical property structuring advice at the front end.
There are a few specific situations where it's worth getting advice before you exchange contracts.
If you're considering a trust structure and haven't had the land tax implications specifically modelled for NSW, that modelling is the single most useful step before you commit.
If you're buying with a partner, family member, or business associate, the share structure and the trust question are connected and worth thinking through together.
If you already hold a portfolio, the cost of getting the structure wrong scales with portfolio size.
If you've been advised to buy in a trust by someone other than a lawyer or accountant who has looked at your complete financial picture, treat that as a starting point rather than a conclusion.
Structure decisions are worth making once, carefully, before purchase. Revisiting them after settlement is the much harder path.
Or if you'd prefer, you can send me a message and I'll get back to you promptly.
You can buy a generic trust deed online, but it needs to interact correctly with NSW duty and land tax rules, your borrowing arrangements, and your tax planning. A misaligned deed can cost more in surcharges and missed concessions than the drafting fee ever saved. Most investors are better off having the structure reviewed before purchase.
You can, but it's treated as a new transaction for both stamp duty and CGT purposes, as if you're selling to the trust at market value. On a property that's appreciated, the tax cost can be substantial. That's the practical reason to settle the structure question before purchase rather than after.
For gains realised before 1 July 2027, yes. The discount is available but flows through to individual beneficiaries rather than being applied at the trust level, so how it's used depends on the beneficiary's other income in the year of sale. From 1 July 2027 the 50% discount is being replaced with an inflation-indexed CGT framework (see the budget FAQ below). For long-term holds, both regimes are worth modelling.
Joint ownership is simpler administratively, but it does not double the NSW land tax threshold. Revenue NSW assesses joint owners as a single primary taxpayer with one threshold for the property held together. Each owner is then separately assessed on their share plus any other land they hold individually, with a secondary deduction to avoid double taxation. Tenants in common rather than joint tenants still gives you flexibility over how shares pass on death. A trust adds complexity and cost that may not be justified unless income splitting or asset protection are real priorities.
This adds real complexity. NSW imposes surcharge purchaser duty and surcharge land tax on foreign persons, and the definition can extend to trusts where certain beneficiaries are non-residents. The surcharge applies even if the foreign beneficiary never receives a distribution, so the deed often needs specific exclusions to avoid being caught.
Yes, in two ways. From 1 July 2027 the 50% CGT discount is being replaced with an inflation-indexed framework, and negative gearing on established residential investment properties bought after 12 May 2026 will be limited to offsetting other residential property income, not wages. Both changes affect how the trust-vs-own-name comparison plays out and how favourable each structure looks. If you're making a structure decision now and plan to hold long term, the modelling needs to reflect the post-2027 rules, not the rules that have applied for the last decade.
