Property Investment Trust
Property carries a certain amount of risk (through bond finance) and should be in a trust, which is an asset holding entity. The costs and taxes (transfer duty) can be efficiently structured if a unit is purchased directly from a development company.
Residential Property Trust
In circumstances where the primary residence is bonded, it is best not to transfer that particular property into a “Family” Trust, as it introduces a “secured risk”, which could affect the other assets in the Trust should the mortgage bond be executed and the home loan recalled.
A preferred strategy is to “ring-fence” the risk and place the primary residence (bonded) into a separate Residential Property Trust.
