Should You Buy Your Home Personally, in a Company or in a Trust?

Choosing whether to buy your home in your own name, a company or a trust shapes your tax, asset protection, borrowing power and paperwork for years.

For most Australians, especially small business owners, the default answer is: buy your principal place of residence (PPOR) in personal names. You usually preserve the main residence capital gains tax (CGT) exemption, access more lenders and simpler loan products, and avoid ongoing entity costs. Companies and trusts can still be useful in specific high‑wealth or legal risk situations, but they’re not a magic tax or asset protection solution.

This guide walks through the trade‑offs so you can make a decision this week, then sit down with your accountant, lawyer and broker together.

There are three main ownership paths for your home: personal, company or trust, each with distinct trade‑offs.

1. Start with the real question: what are you trying to protect or optimise?

Before comparing structures, be clear on what problem you’re solving.

Typical goals:

1. Protect the family home if the business goes bad
2. Minimise tax now and on eventual sale
3. Make borrowing as simple and flexible as possible
4. Plan for inheritance and family law issues
5. Position for future investments or upgrading homes

There is no structure that maximises all of these at once.

In our companion guide for business owners, we explain why around 90% of small business families are usually better off owning the PPOR personally, often in the lower‑risk spouse’s name [/insights/business-owners-home-personal-vs-trust-vs-company]. This broader article applies the same thinking to a wider audience – first‑home buyers, investors and small business owners – in light of upcoming tax changes.

2. The three main ways to own a home in Australia

2.1 Personal ownership (most common)

You own the property in your individual name(s) – either solely or jointly.

Key features:

• Eligible for the main residence CGT exemption on most or all of the gain when you sell.
• You may pay little or no land tax on your PPOR, depending on your state.
• Straightforward for lenders – widest choice of banks, simplest assessment.
• Simple estate planning: your share passes via your will (or survivorship for joint tenants).

For most homeowners, this is the default starting point.

2.2 Company ownership

A company (Pty Ltd) is the registered owner of the property.

Key features:

• The company does not get the main residence CGT exemption. Any gain is taxed in the company at corporate tax rates.
• Shareholders don’t "own" the property – they own shares in the company.
• Can offer some commercial asset protection, depending on how guarantees and loans are structured.
• Fewer lenders, often with stricter serviceability and higher interest rates.

2.3 Trust ownership (usually a discretionary / family trust)

A trustee (individual or company) holds the property on trust for beneficiaries.

Key features:

• The trust generally misses out on the full main residence CGT exemption (complex limited scenarios aside).
• Rental income and later capital gains can be distributed to beneficiaries, useful for investment properties.
• Can offer asset protection if structured and operated correctly.
• Borrowing is more complex; lenders want personal guarantees from directors/individuals.

If you’re thinking about high‑end homes in trusts, see also: [/insights/high-end-homes-family-trusts-lending-tax-limits].

3. Tax differences: home vs company vs trust

Tax is where a lot of myths live. Let’s clear them out.

3.1 Main residence CGT exemption – the big ticket item

Right now, if you:

• own your home personally, and
• it’s your main residence for the whole time you own it, and
• it’s on land within the allowed size (2 hectares),

…you’re generally entitled to the main residence CGT exemption when you sell.

That can easily mean hundreds of thousands of dollars in tax saved over a long holding period.

In contrast:

• Companies do not get this exemption.
• Trusts generally do not get the full exemption either, except in narrow circumstances where specific rules apply and the Commissioner accepts a look‑through (specialist advice needed).

On top of this, the Government has legislated to replace the 50% CGT discount for individuals and trusts with an indexation approach and a 30% minimum tax on most capital gains from 1 July 2027 (see knowledge facts 4, 15–20). That makes CGT planning even more important for properties not covered by the main residence exemption.

Practical takeaway: if there’s a decent chance you’ll sell your home with a big gain, keeping it in personal names to lock in the main residence exemption will usually beat any structural tricks.

3.2 Deductibility of interest on your home loan

A key principle: interest deductibility follows the use of the borrowed money, not the name on the title.

• If you borrow to buy your home to live in, the interest is usually not deductible, even if a company or trust owns it and charges you rent at market rates (complex anti‑avoidance rules may apply).
• If you borrow to buy an investment property (whether in your name, a trust or company), interest is generally tax‑deductible to whoever is the legal borrower/owner, subject to the usual rules.

Some people try to:

1. Have a trust or company own the home.
2. Pay rent to that entity.
3. Claim tax deductions on the interest inside the entity.

This usually fails as a strategy because:

• You lose the main residence exemption.
• You may still end up with similar or worse after‑tax outcomes, especially after 2027 CGT changes.
• ATO may target contrived arrangements under anti‑avoidance provisions.

3.3 Land tax

Most states and territories either exempt your PPOR from land tax or apply a more generous threshold/rate when it’s your main residence.

Companies and trusts usually don’t get this treatment. In some states, there are also trust surcharge rules or foreign owner surcharges.

Over 10–20 years, extra land tax can easily wipe out any perceived structuring benefit.

4. Asset protection: what does a structure really buy you?

Many business owners ask: “If I put the house in a company or trust, it’s safe, right?”

Not necessarily.

4.1 The personal guarantee trap

When a company or trust borrows, lenders almost always require personal guarantees from directors and key beneficiaries.

So even if the property is owned by an entity, your personal guarantee can expose your other assets, including your personal home, to recovery action if the loan defaults.

This is why our guide for business owners stresses that guarantees can undo much of the asset protection you thought you were getting [/insights/business-owners-home-personal-vs-trust-vs-company].

4.2 Bank vs non‑bank creditors

Broadly:

• Banks and secured lenders can pursue the specific property securing the loan, and any guarantor’s property, regardless of the ownership structure.
• Unsecured trade creditors or litigants might be blocked by a properly‑run trust or company structure – but not if there’s evidence of sham arrangements, under‑market transactions, or transfers designed to defeat creditors.

4.3 The lower‑risk spouse strategy

A simpler, often more effective approach for couples:

• Put the family home in the lower‑risk spouse’s name, and
• Keep the higher‑risk spouse (director, professional with litigation risk) off the title and off non‑essential guarantees where possible.

This can give meaningful protection in many real‑world scenarios without sacrificing the main residence exemption or adding entity costs.

4.4 When entity structures genuinely help

Company or trust ownership can be useful where:

• You already have significant wealth and low debt.
• You face material litigation risk (e.g. some medical, legal, or construction roles).
• You have a multi‑generation estate plan (e.g. blended families, children with vulnerabilities).
• You’re buying a mixed‑use property (part business, part home) where the business component is substantial.

Even then, the numbers and legal advice must stack up.

For business owners, structures can offer protection but often add complexity and cost.