Buying property through a trust or company can be an option for some property buyers in Victoria.
However, buying property through a different ownership structure is not simply a matter of putting a company or trust name on the Contract of Sale.
The structure needs to be considered before signing the contract, because changing the purchaser or ownership structure after signing can create additional legal, duty and conveyancing issues.
This article explains some of the key conveyancing considerations when buying Victorian property through a trust or company.
Important: This article provides general conveyancing information only. Whether a trust or company is appropriate for your circumstances can involve legal, tax, accounting, finance and asset-protection considerations. You should obtain appropriate professional advice before deciding on a structure.
Can I buy property through a trust or company in Victoria?
Yes.
A property in Victoria can be acquired by a trustee on behalf of a trust, or by a company in its own capacity, depending on the structure and transaction.
The important point is that the correct purchaser needs to be identified before the Contract of Sale is signed.
For example, a buyer may be considering:
- Buying the property in their own personal name
- Buying through a company
- Buying as trustee for a trust
- Buying through a corporate trustee for a trust
These structures can have different legal, tax and duty consequences.
The State Revenue Office confirms that when a trustee acquires dutiable property, land transfer duty applies in the same way as for other purchasers, subject to the applicable rules.
What is the difference between buying personally, through a company or through a trust?
The legal ownership structure is different.
Buying in your personal name
If you buy property personally, your name will generally be recorded as the registered proprietor once the transfer is registered.
For example:
May So
Buying through a company
A company can acquire property in its own name.
For example:
ABC Property Pty Ltd
The company is a separate legal entity from its shareholders and directors.
Buying through a trust
A trust is different.
The trustee is the legal owner of the trust property and holds it for the beneficiaries of the trust. The State Revenue Office describes the trustee as the legal owner and the beneficiary as the person who benefits from the property.
For example, the purchaser may be shown as:
ABC Pty Ltd as trustee for the ABC Family Trust
The exact name used should be confirmed before the Contract of Sale is signed.
Why is it important to decide the structure before signing?
This is one of the most important points for buyers.
A Contract of Sale identifies the buyer and seller.
Consumer Affairs Victoria explains that a property is sold when the buyer and seller have both signed the Contract of Sale, and the contract contains the names of the parties.
This means you should not simply sign the contract in your personal name and assume you can easily change the purchaser to a company or trust later.
If you are considering buying through a trust or company, discuss the proposed structure with your accountant, lawyer and conveyancer before signing.
Do I need to set up the trust or company before signing?
In many situations, this should be dealt with before you sign the Contract of Sale.
If you intend to purchase through a company, the company generally needs to exist before it enters into the transaction.
Similarly, if you intend to purchase as trustee for a trust, the trust structure and trustee arrangements should be properly established before signing.
You should not assume that you can establish the structure after signing and simply substitute the new entity without further consequences.
If you are unsure about the correct purchaser name, get the structure confirmed before signing.
What name should appear on the Contract of Sale?
The purchaser’s name should accurately reflect the intended ownership structure.
For example, if a company is purchasing in its own capacity, the company should be correctly identified.
If a company is acting as trustee, the contract may need to identify the company in its capacity as trustee.
The exact wording can depend on the structure and transaction.
This is one reason it is important to provide your conveyancer with the relevant company and trust information before the contract is prepared or signed.
What if I sign the contract in my personal name and later want the company or trust to own the property?
Do not assume this is a simple name change.
Changing the purchaser after a Contract of Sale has been signed can involve issues relating to:
- The original contract
- The seller’s agreement
- Nomination
- Stamp duty
- Beneficial ownership
- Finance
- The trust or company structure
- Settlement requirements
Depending on the circumstances, a change in purchaser may have duty consequences.
The Victorian State Revenue Office has specific rules dealing with transactions involving trusts, including changes in beneficial ownership and certain nominee arrangements. Some exemptions may be available, but they have specific requirements and are not automatic.
If you are considering changing the purchaser after signing, obtain advice before assuming the change can be made without additional duty or other consequences.
You can also read our guide on nomination of a purchaser after signing a property contract for more information about the general conveyancing issues involved.
What is stamp duty when buying through a trust?
Stamp duty is generally called land transfer duty in Victoria.
Buying through a trust does not automatically mean that no duty is payable.
The SRO states that when a trustee acquires dutiable property, duty applies in the same way as for any other purchaser. Duty is generally calculated on the greater of the price paid or the market value of the property.
There are also specific rules for different types of trusts, including:
- Discretionary trusts
- Fixed trusts
- Unit trust schemes
- Hybrid trusts
The duty consequences can differ depending on the type of trust and what happens to the property or beneficial interests.
For a general explanation of Victorian duty, see our article on stamp duty reductions and exemptions in Victoria.
What about stamp duty when buying through a company?
A company purchasing property is generally subject to the applicable Victorian land transfer duty rules.
The fact that the purchaser is a company does not automatically remove or reduce the duty payable.
The amount of duty depends on the transaction and the applicable rules.
It is important to distinguish this from landholder duty, which is a separate regime that can apply when someone acquires an interest in a company or unit trust that holds Victorian land meeting the relevant threshold.
The SRO currently states that landholder duty may apply where a person acquires an interest in a company or unit trust that holds Victorian land valued at $1 million or more.
That is generally more relevant to acquiring an interest in a landholding entity than to an ordinary purchase of property directly by a company.
What about land tax when buying through a trust?
Land tax is another issue buyers should consider.
Trust property can be subject to different land tax treatment from property owned personally.
The Victorian SRO states that land held on trust is usually taxed at a higher rate than land owned by individuals, known as the trust surcharge, although different rules and exemptions can apply depending on the trust.
Trustees also have notification obligations when they acquire land.
The SRO currently requires trustees acquiring Victorian land to notify it within one month of acquiring the land.
Because land tax is separate from conveyancing, buyers should obtain appropriate tax advice about their particular structure.
Can I buy my home through a trust or company?
It may be possible, but you should not assume that a trust or company structure will receive the same treatment as an individual owner.
For example, the availability of certain concessions or exemptions can depend on:
- The type of trust
- The ownership structure
- How the property is used
- Who occupies the property
- The applicable Victorian rules
The SRO has specific rules dealing with trusts and principal places of residence for land-tax purposes.
If you are considering using a trust or company to buy your family home, obtain tax and legal advice before signing the contract.
What about finance?
Your proposed ownership structure should also be discussed with your lender or mortgage broker.
The lender may have requirements relating to:
- The borrower
- The purchaser
- The trustee
- The company
- Directors and shareholders
- Guarantors
- Trust documents
- Loan documents
The entity purchasing the property and the entity borrowing the money may need to be correctly coordinated.
This is another reason not to leave the ownership structure until settlement.
What documents might my conveyancer need?
The documents required depend on the structure.
For a company, your conveyancer may need information such as:
- Company name
- ACN
- Company details
- Details of directors
- Other information required for the transaction
For a trust, your conveyancer may need:
- Trust name
- Trustee details
- Trust deed
- Details of the type of trust
- Other documents required for the transaction
Your conveyancer may also need documents for the lender and settlement.
If your trust deed is relevant to the transaction, make sure you can provide a complete copy.
The SRO also has specific requirements concerning the lodgement of certain trust deeds and transactions. For example, trust deeds that fall within the relevant duty rules generally need to be lodged through Duties Online within the required timeframe.
What if I have not decided whether to buy personally, through a trust or through a company?
Do not rush to sign the contract.
This is one of the situations where obtaining advice before signing can be particularly important.
Your accountant or tax adviser can help you consider the tax implications.
Your lawyer can advise on legal and structural issues.
Your lender or mortgage broker can consider the finance implications.
Your conveyancer can then assist with the conveyancing requirements once the purchasing structure has been determined.
A contract review before signing can also help identify the purchaser details and other contractual issues that should be considered before you commit to the transaction.
Can I use a company as trustee for a trust?
Yes, a company can act as trustee for a trust.
This is commonly referred to as a corporate trustee.
However, the company is acting in its capacity as trustee rather than simply buying the property as an ordinary company purchaser.
The correct legal capacity needs to be reflected in the transaction documents.
This is another reason why your conveyancer needs accurate information about the structure before preparing the conveyancing documents.
What happens at settlement?
Once the contract has been signed and the transaction progresses to settlement, your conveyancer will coordinate the settlement requirements with the other parties and, where applicable, the lender.
For a buyer purchasing through a company or trust, this may involve checking:
- Purchaser details
- Transfer documents
- Duty requirements
- Trust or company documentation
- Finance requirements
- Identity and compliance requirements
- Settlement funds
- Registration requirements
Your conveyancer will coordinate the conveyancing aspects of the transaction.
Our guide to what happens after signing a property contract in Victoria explains the general steps between signing the contract and settlement.
What if I want to change the structure before settlement?
Speak to your conveyancer before making the change.
For example, you may sign a contract and later decide that a company should purchase the property instead of you personally.
You should not simply ask the agent to change the name on the contract.
Depending on the circumstances, the change may involve:
- A nomination
- A transfer
- A change in beneficial ownership
- Seller consent
- Lender approval
- Additional documentation
- Additional duty
The SRO specifically notes that changing from holding Victorian dutiable property personally to holding it as trustee, or vice versa, can have duty consequences even where legal title does not change.
Get advice before making the change.
What are some common mistakes buyers make?
1. Signing before deciding on the structure
This can create unnecessary complications later.
2. Using the wrong purchaser name
The name on the Contract of Sale should accurately reflect the intended purchaser.
3. Assuming a trust automatically saves stamp duty
A trust does not automatically mean that no duty is payable.
4. Ignoring land tax
The land-tax treatment of trust property can be different from personally owned property.
5. Setting up the structure too late
Trying to establish the trust or company after signing can create timing and documentation issues.
6. Assuming the structure can easily be changed later
Changes to ownership or beneficial interests can have duty consequences.
7. Forgetting to tell the lender
The lender needs to know the proposed purchaser and borrowing structure.
8. Treating a conveyancer as a tax adviser
Your conveyancer can assist with the conveyancing process, but tax and structural advice should come from the appropriately qualified professional.
What should I do before buying property through a trust or company?
Before signing the Contract of Sale, consider the following:
☐ Have I decided who will purchase the property?
☐ Has my accountant or tax adviser considered the proposed structure?
☐ Have I obtained legal advice if required?
☐ Has the trust been properly established, if applicable?
☐ Has the company been properly established, if applicable?
☐ Does my lender know the proposed purchasing structure?
☐ Does my conveyancer know the proposed purchaser details?
☐ Have I provided the relevant trust or company documents?
☐ Have I considered stamp duty?
☐ Have I considered land tax?
☐ Am I clear about who will be registered as the owner?
☐ Have I confirmed the purchaser name before signing?
A simple example
Imagine a buyer wants to purchase a Victorian investment property for $800,000.
The buyer is considering purchasing:
Option 1: Personally
Option 2: Through a company
Option 3: Through a company acting as trustee for a family trust
The buyer should not simply choose a structure based on the name that appears on the contract.
Before signing, the buyer should discuss the proposed structure with the appropriate accountant or tax adviser, lawyer and lender.
Once the structure has been decided, the buyer can provide the correct purchaser details to their conveyancer.
The conveyancer can then assist with the conveyancing and settlement requirements for that structure.
The important point is:
Decide on the ownership structure before signing whenever possible.
How Prox Conveyancing can help
Buying property through a trust or company can involve additional conveyancing considerations compared with a straightforward individual purchase.
At Prox Conveyancing, we assist Victorian buyers with the conveyancing process, including contract review, purchaser details, property searches, settlement preparation and coordination with lenders and other parties.
If you are considering buying property through a trust or company, contact us before signing the Contract of Sale so we can understand the proposed purchasing structure and explain the conveyancing requirements.
You can also explore our conveyancing services for buyers throughout Victoria for more information about how we assist buyers from contract through to settlement.
Frequently Asked Questions
Can I buy a Victorian property through a trust?
Yes. A trustee can acquire Victorian property for a trust, subject to the applicable legal, duty, tax and conveyancing requirements.
Can a company buy property in Victoria?
Yes. A company can acquire property in its own name, subject to the applicable requirements.
Is buying property through a trust cheaper?
Not necessarily. Trust and company structures can have different tax, duty, land-tax and other costs. You should obtain appropriate professional advice before choosing a structure.
Do I pay stamp duty when buying property through a trust?
Generally, duty applies when a trustee acquires dutiable property, subject to the applicable Victorian rules and any available exemptions.
Does a trust have to pay land tax?
Land held on trust can be subject to land tax and may be subject to the trust surcharge, depending on the circumstances.
Can I change the purchaser from myself to a company after signing?
It may be possible in some circumstances, but you should obtain advice before doing so. The change can raise contractual, duty, finance and conveyancing issues.
Should I set up my trust before signing the Contract of Sale?
If you intend to buy through a trust, it is generally sensible to have the proposed structure properly established and confirmed before signing. The exact requirements depend on your circumstances.
Can my company act as trustee for my trust?
Yes, a company can act as trustee for a trust. The correct legal capacity needs to be reflected in the transaction documents.
Does Prox Conveyancing provide tax advice about trusts and companies?
Our role is to assist with the conveyancing and property transaction. Tax, accounting and structural advice should be obtained from an appropriately qualified accountant, tax adviser or lawyer.
Final Thoughts
Buying property through a trust or company can involve more than simply choosing a different name for the purchaser.
The ownership structure can affect the contract, settlement, duty, land tax, finance and documentation requirements.
The safest approach is to decide on the appropriate structure and obtain the relevant professional advice before signing the Contract of Sale.
Once your structure has been determined, your conveyancer can help you navigate the Victorian conveyancing and settlement process.
About the Author
Meet Sally
Sally Kwok is a Licensed Conveyancer and the Director of Prox Conveyancing. With more than 16 years of experience in the conveyancing industry, she is committed to helping buyers and sellers navigate Victorian property transactions with confidence. Sally is passionate about providing clear communication, practical guidance and personalised service throughout every stage of the conveyancing process.
👉 Learn more about Sally on our About page.
About Prox Conveyancing
Prox Conveyancing is a Victorian conveyancing practice providing professional conveyancing services for residential property transactions across Victoria. We assist buyers, sellers, investors and families with a wide range of conveyancing matters, delivering personalised service, transparent communication and professional support from contract through to settlement.
👉 Learn more about Prox Conveyancing on our About page.
This article provides general information only and is not legal advice. Every property transaction is unique, and the information above may not apply to your particular circumstances. If you require advice about your specific situation, please contact a qualified legal professional or licensed conveyancer.