But this is legal advice and a broker shouldn’t be giving advice on trusts. An accountant couldn’t even advise on trusts like this and financial planners even less. Best to leave trusts to the lawyers I think.

Your definition of trusts is wrong. A trust is a legal relationship where one person holds property for the benefit of another under obligations. A trust may only need an ABN if it is in business.

A discretionary trust is a type of trust in which the trustee has discretion as to which beneficiary to distribute income and/or capital to.

Asset protection with a discretionary trust arises from the bankruptcy of a beneficiary. The assets of the trust are generally not property that can fall into the hands of a trustee in bankruptcy. If the trustee is sued, however, the assets of the trust will be at risk because of the trustee’s right of indemnity.

“Beneficiaries not being registered in the trust deed” – this doesn’t make sense. A beneficiary doesn’t need to be registered in the trust deed. A person just has to be a beneficiary which could be possibly without them even being named in the deed.

Holding costs for trusts can be nil upwards. There are accounting fees which will depend on what the trust does. A trust holding one property may be $600 or so. Not sure what governance fees are.

The whole section on loans is misleading.
A trust is not a legal entity so the property cannot be in the trust name. The property and loan would be in the name of the trustee. The trustee would generally be the borrower with any individual director of the trustee giving a guarantee to the loan.

I would say probably 95% of lenders lend to trusts.
Some lenders do charge higher rates, but generally the rates will be the same or similar to loans to individuals. Westpac are generally not good for trusts, but St George are great.

Borrowing capacity could be greatly improved with a trust – I have written a thread on that here somewhere. Can’t say I have ever encountered a lender insisting on a 25 year loan for a trust. Some lenders do charge a fee for their solicitors to review the trust deed to make sure the trustee is allowed to borrow and mortgage – fees are about $300 to $400 usually.

Etc etc

Well lots to consider. You really need to do some reading and then seek specific legal advice.

Perhaps work out the costs first.

I have only ever had a few clients who have done this a and they had heaps of equity so it was done as part of a debt recycling strategy as well.

It’s like buying a book. Doesn’t matter if you are registered or not, but sale price includes gst. If you are registered you can claim the gst if not you wear it.

Prob a serviceability issue. Short term loans will have very high repayments compared to same loan over 30years

Keep in mind it has a few errors and is overly simplistic so don’t rely on it too much, but I think it can be a good intro.

Great Podcast Ziv – just listened to it.

Hi Moresh

“We assist property developers in setting up the legal structures”

This is legal advice so you would need to be lawyers to do this.

Stamp duty could be eliminated completely if certain conditions are met – or dramatically reduced.
No investors wouldn’t become liable for the debts of the developer.

You could keep the mortgage but pay out the loan and redraw and invest at owner occupied rates. Don’t use cash from the offset to directly invest as the resulting interest will not be deductible.

Seek tax advice

If it is structure advice you are after this is legal advice. Financial advisers will have no idea – yet often still advise on this poorly.

They lender may alternatively want to control the payment of the funds. So you could be approved without access to the funds until the point when you find a property and have entered the contract of sale. The new property may not be used as security but they will want to make sure the funds are used for this.

Cash out over about $50k is a problem these days