All Topics / Legal & Accounting / Moving Property into a Family Trust

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  • Profile photo of OrionOrion
    Member
    @orion
    Join Date: 2003
    Post Count: 16

    Hello,

    We have recently created a Family trust through which we bought a positively geared property.

    The problem is that we want to move our current property in which we live in into the trust and rent the property back from the trust.

    I know that if we move our house in to the trust, we will be required to pay land tax every year, but I think that the benefits of the extra deductions on repairs, interest paid etc will make it worthwhile.

    The question is:

    Is there a way to move our home into the trust cheaply? Like gifting it, or something like that.

    Also, if anyone knows of an good accountant in Canberra who they would recommend for dealing with trusts (Family/Hybrid), I would greatly appreciate it.

    Thanks in advance.

    Chris

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Chris

    You will have to pay stamp duty on this, as well as legal fees. Also bear in mind that you will have to charge yourself market rent, and therefore after a number of years the rent will exceed the interest and the trust will be making a profit. Depending on who you distribute to, extra tax may be payable where otherwise you wouldn’t. Also you lose your PPOR CGT exemption.

    SO carefully weigh up all the positives and the negatives before you do this. It may still be worth it?

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
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    Profile photo of snowboardersnowboarder
    Participant
    @snowboarder
    Join Date: 2003
    Post Count: 23

    Hi

    i do not know the answers to your questions but do you think it is a wise move moving your residence into the trust ?

    doing so you will give up your right to no CGT, if you ever wish to sell that place. if you do not put it in the trust you do not have to pay cgt when you sell. as it is your principle place of residence PPOR.

    maybe others can help you with your questions

    Profile photo of OrionOrion
    Member
    @orion
    Join Date: 2003
    Post Count: 16

    Hello,

    Thank you for your replies. :)

    I guess I should have also added the fact (you always things of things after you write the post) that in a couple of years we plan to rent the house out and move into another house and so I wanted the house to become ready to become an investment property.

    Thanks

    Kind reagrds,

    Chris

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