Hi… what are the benefits of buying an investment property in a family trust and what impact does it have on being able to get a loan?

Hi Oliver

The benefits depend on if the investment property is negatively or positively geared.

If the investment property is negatively geared and results in a trust tax loss then the loss is carried forward until the trust has a profit and then the losses are recouped. If held in individual name then negative gearing can be used to reduce your taxable income.

If trust has a profit scenario then it's beneficial as the profits can be distributed to various beneficiaries.

The discretionary trust also has a lower land tax threshold and since land tax is levied each year, this might be a sizeable disadvantage over the life of the investment property holding.

Hope this helps as a start.