Structure
Trust, company, SMSF or own name?
A practical comparison across land tax, CGT, asset protection, borrowing capacity and ongoing compliance.
Ownership structure is the single decision most investors get wrong before they even see a property. It is reversible, but only at the cost of stamp duty, CGT and legal fees. Get it right early and you compound the benefit across every property that follows.
The four common options, side by side
| Own name | Discretionary trust | Company | SMSF | |
|---|---|---|---|---|
| Land tax | Threshold per state | Often no threshold (state-dependent) | Flat, no threshold | Concessional, depends on fund |
| CGT discount | 50% (12m+) | 50% flows through | 0% | 33.3% (12m+) |
| Asset protection | Low | High | High | Very high (super) |
| Borrowing capacity | Strongest | Limited (servicing) | Limited | Business real property only |
| Setup + ongoing cost | $0 / very low | $1.5–3k + annual | $1k + annual | $2–4k + audit |
| Best fit | First property, PAYG buyer | Multi-property, family wealth | Trading + holding combo | Long-hold retirement asset |
The trade no one talks about: borrowing capacity
Trusts and companies look great on tax. They often look terrible on serviceability, because lenders haircut distributions and apply shading on directors’ guarantees. The “best” structure on paper can stop your portfolio at property two.
Same borrower, same income, borrowing capacity by structure
$ borrowing capacity, indicative
The right structure is the one that lets you buy the next property, not the one that wins on a single tax line.
How we sequence it
- Property 1–2: usually own name or joint, to preserve maximum borrowing capacity.
- Property 3+: trust often becomes attractive once land-tax thresholds and asset protection start mattering more than servicing.
- SMSF: only when the long-term retirement plan justifies the compliance load, and the fund is genuinely growth-stage, not last-minute. Note the 10 August 2026 change: a new LRBA can only fund business real property, so residential inside super now has to be bought outright with fund cash.
| Feature | Own name | Discretionary trust | SMSF |
|---|---|---|---|
| Negative gearing vs salary | Yes | No (trapped in trust) | No |
| 50% CGT discount | Yes (12mo+) | Yes (12mo+) | 33.3% (super) |
| Asset protection | Low | High | High |
| Max LVR | ~90% (LMI) | ~80% | Nil on residential (cash only), ~65–70% on business real property |
| Setup cost | Nil | $1.5–3k + annual | $3–6k + ~$3k/yr |
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FAQ
Frequently asked
- Can I negatively gear a property held in a trust?
- Losses are trapped inside the trust and can only be offset against future trust income, they cannot reduce your personal salary. That's why trusts suit positively-geared assets, not negatively-geared ones.
- How much super do I need to buy property in an SMSF?
- There is no legal minimum, but the bar rose on 10 August 2026: a new LRBA can only fund business real property, so a residential purchase now needs the full price plus duty, costs and a liquidity buffer in the fund. For business real property under an LRBA, budget roughly 30–35% of the price in cash. ASIC guidance suggests $200,000+ for an SMSF to be cost-effective.
- Can I live in a property owned by my SMSF?
- No. Residential property owned by an SMSF cannot be lived in, rented or used by you, your relatives, or any related party at any time. Commercial property has different rules.
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Written & reviewed by
The NOVAQ founders
Every NOVAQ article is written or reviewed by our founders, both Chartered Accountants who actively invest in Australian property. Not journalists, not interns.
Shreyas Doshi
Co-Founder · Chartered Accountant
15+ yrs in international tax, compliance, structuring and advisory across Deloitte, PwC and a large multinational mining company. Multi-state personal portfolio under different structures.
Yuvraj Kapadia
Co-Founder · CA, CPA, SMSF Specialist
ASIC-registered SMSF Auditor, Tax Agent, licensed Finance & Mortgage Broker and Buyer's Agent. Multi-state personal portfolio under different structures.
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