Trust tax changes and property
What budget and tax changes could mean for property held in family and unit trusts, including distributions, land tax and when to review your structure.
Should I restructure a property trust because of the budget?
Not until changes are legislated and you have advice. Trusts are used for asset protection and distribution flexibility, but they carry costs, state land tax surcharges in some cases, and complex rules. Investors in Sydney, NSW and Australia should review how any confirmed change affects distributions before moving assets, because transfers can trigger duty and CGT.
Restructuring has its own costs
Moving property out of a trust can trigger stamp duty and capital gains tax. These can outweigh the benefit of a change.
Distribution rules
Trustees must make valid resolutions each year. ATO guidance on reimbursement agreements affects how distributions are tested.
State land tax
NSW and other states treat trusts differently for land tax thresholds and surcharges.
Frequently asked questions
Are trusts being abolished?
Check legislation status; announcements vary and many proposals do not pass.
Do trusts get the CGT discount?
Generally yes, if the gain flows to eligible beneficiaries.
Can a trust hold an SMSF property?
SMSF property may be held through a bare trust under borrowing rules.