Some investors buy property through a family (discretionary) trust or unit trust for asset protection or tax planning. Whether a trust suits you is a question for your accountant and solicitor. Here, we focus on how lenders treat trust borrowing.
Common reasons people use trusts
- Asset protection, for example business owners or professionals with liability exposure
- Income distribution flexibility, for family trusts
- Estate planning
There are downsides too, including land tax (trusts often pay higher land tax in NSW and don't get the general threshold in some cases), set-up and running costs, and changes in the 2026 Budget affecting how trusts are taxed on capital gains.
How lenders assess trust loans
The trustee is the borrower
The trustee (often a company) borrows on behalf of the trust. Lenders need to check the trustee has power under the trust deed to borrow and grant a mortgage.
Personal guarantees
Lenders almost always require the directors of the corporate trustee, and often the beneficiaries or appointors, to personally guarantee the loan. The asset protection benefit doesn't extend to the lender.
Serviceability
Lenders look at: - Rental income of the trust property - Trust income and distributions - Guarantors' personal income and debts
Many lenders assess the trust and guarantors together.
Documents
Expect to provide: - Full trust deed and any variations - Corporate trustee company documents (ASIC extract) - Trust financial statements and tax returns (if the trust is established) - Guarantors' personal financials
LVRs and rates
Most mainstream lenders lend to trusts at similar LVRs to individuals, typically up to 80% without LMI, sometimes up to 90%. Rates are usually the same as for investment loans, though some lenders add a small margin.
New trusts
A newly established trust has no trading history. Lenders will rely mostly on the guarantors' income and the property's rental income.
SMSFs are different
A self-managed super fund is a type of trust, but lending to SMSFs uses limited recourse borrowing arrangements with strict rules. Fewer lenders offer SMSF loans. See our article on SMSFs and property.
Tax changes to watch
The 2026 Budget included a minimum 30% tax on certain trust distributions and changes to the CGT discount from July 2027. These may affect whether a trust still suits your goals. Get current advice before setting one up.
Frequently asked questions
Can a trust use the 5% Deposit Scheme?
No. Government first home buyer schemes are for individuals buying a home to live in.
Can I move a property I own into a trust?
You can, but it's usually treated as a sale, triggering stamp duty and potentially CGT.
Do I need a corporate trustee?
Lenders often prefer one, and it's generally recommended for property-holding trusts.
Buying through a trust? Call Finfident on 0424 545 654. We'll work with your accountant to find lenders comfortable with your structure.
This article is general information only and doesn't take into account your objectives, financial situation or needs. Figures, rates and scheme rules are current as at October 2026 and can change. Finfident Finance Brokers (ABN 94 679 280 801) is Credit Representative 569374 of Outsource Financial Pty Ltd (ACN 131 090 705), Australian Credit Licence 384324.