Buying property through a Trust is becoming increasingly popular in Australia, particularly among families, investors and self-employed individuals looking to protect their assets and optimise tax outcomes. A Trust Home Loan works much like a personal mortgage, except the borrower is the Trust (through the Trustee), and lenders assess both the Trust structure and the individuals behind it.
A Trust Home Loan is a loan used to purchase property through a Trust structure rather than in your personal name. This approach is commonly used by families, investors and business owners seeking asset protection, tax flexibility and long-term wealth planning.
A Trust itself cannot borrow money because it is not a legal entity capable of signing contracts or holding a credit profile. For this reason, the Trustee acts as the borrower on behalf of the Trust.
The Trustee may be an individual or a company. Their name appears on the loan documents and property title, typically recorded as “Jane Smith acting as the Trustee for the Smith Family Trust”. Although the Trustee is the legal owner, the Trust holds the beneficial interest. This means the beneficiaries named in the Trust Deed receive the financial benefits of rental income and any growth in the property’s value.
Trustees can apply for a loan on behalf of the Trust as long as the Trust Deed gives them the authority to borrow money and use Trust property as security, as confirmed by a solicitor. Before a Trust loan can be approved, a few key steps must be completed:
Trustees and anyone guaranteeing the loan may need to obtain independent legal and financial advice to ensure they understand their responsibilities.
Lenders typically require personal guarantees for Trust loans.
Identification documents for the Trust include certified copies of the Trust Deed and any Deed amendments. Adult beneficiaries who are required to act as guarantors must also provide standard identification documents.
The following Trust types are most commonly considered for residential and commercial lending. Each structure serves a different purpose and comes with its own advantages and considerations. Lenders have their own credit policy in relation to the type of Trusts they lend to.
A Discretionary Trust is a flexible structure where the Trustee decides which beneficiaries receive income or assets from the Trust. These Trusts are commonly used by families (known as Family Trusts) to hold investments and manage wealth over the long term.
A Unit Trust works like shared ownership. Each investor holds a set number of units, and their share of income or assets is based on how many units they own. Unit Trusts are often used for joint investments between business partners or groups.
Trust Home Loans involve several parties, each with specific roles and responsibilities such as:
The Trust: The legal entity holding the property's beneficial interest, established by a Trust Deed.
The Trustee: The legal borrower managing the Trust.
Applying as "John Smith acting as Trustee for [Trust Name]" or "[Company Name] Pty Ltd acting as Trustee for [Trust Name]."
The Beneficiaries: Individuals benefiting from the Trust.
The Guarantor: Lenders often require personal guarantees to cover the loan if the Trust can’t repay it.
They are typically provided by:
Buying property through a Trust provides significant advantages, but also comes with limitations that buyers should understand.
Applying for a Trust Home Loan requires information about the Trust’s setup, the identity of all parties and financial capacity. Lenders generally request:
Yard’s team will provide a tailored checklist and guide you through the documentation process.
Yard is a non-bank lender with expertise in home loans for Trusts. We understand complex structures, including Trust Deeds, beneficiary arrangements, self-employed income and non-traditional financial situations. Each application is assessed on its individual merits, with our Loan Consultants guiding you through the process and helping identify options suited to your circumstances. If your Trust structure requires a more specialised lending approach, Yard’s expertise ensures you have options designed around your needs.
Yes. Low doc Trust loans are available when full financial documents cannot be provided. Low doc Trust loans typically require larger deposits and may have slightly higher interest rates compared to full documentation (full doc) Trust Home Loans. These loans are particularly useful for newer businesses or Trusts with complex income structures. Yard is a specialist in Trust Home Loans, and our Loan Consultants can guide you through flexible low doc options for Trust borrowers.
No. The loan must be in the Trust’s name, through the Trustee. You may still need to provide a personal guarantee, but the borrower is always the Trustee on behalf of the Trust.
Legal and accounting advice is strongly recommended. A lawyer can confirm your Trust Deed permits borrowing and mortgaging property, which most lenders require. An accountant can advise on tax implications and distribution strategies.
It depends on whether the Trustee is an individual or a company. If an individual is acting as the Trustee, they are the borrower in their capacity as Trustee. Lenders typically still require a personal guarantee to ensure the individual Trustee is personally liable for the loan taken out on behalf of the Trust.
If the Trustee is a company, the company is the borrower, and the directors are usually required to act as personal guarantors. In some situations, lenders may also request guarantees from adult beneficiaries, depending on the lender’s policy and the Trust’s financial position.
Yes, but transferring property to a Trust may trigger stamp duty and have tax implications. The property must be transferred at market value and a new Trust loan must be established. Seek legal and tax advice before proceeding.
For a typical Family (Discretionary) Trust, income is normally distributed to beneficiaries who then pay tax at their personal tax rates. If the income is retained in the Trust (i.e. not distributed), then the Trustee is generally taxed at the highest individual marginal rate. Read more on ATO’s Trust income guide.
Eligible Trusts must have a valid Trust Deed, permission to borrow, the capacity to service the loan and acceptable credit history. Trustees and guarantors must meet lender requirements. Yard has expertise in Trust lending and can assess a wide range of Trust structures.
Most Trust home loans allow an LVR of 80%, meaning a 20% deposit is typically required. The exact LVR depends on the Trust type, financial strength, guarantors and property type. Some lenders like Yard can consider Trust loans up to 90% LVR.
The Trustee is responsible for making loan repayments on behalf of the Trust. The Trustee must ensure the Trust has enough income to meet its obligations. If the Trust cannot repay the loan, the guarantors, usually the Trustees and adult beneficiaries, become personally liable.
You can get started in minutes by completing an online application here. A Yard Loan Consultant will reach out within 24 hours. Simply tell us about the property you’re purchasing or refinancing and provide a quick overview of your income, employment, assets, and expenses.
Once submitted, your dedicated Loan Consultant will review your requirements and guide you through the next steps. You’ll then upload your supporting documents through our secure portal, and we’ll assess your application. The assessment typically takes two business days, and once approved, you’ll receive and sign your loan documents online. We’ll then coordinate directly with your conveyancer to complete the settlement. Read more on how to apply for a Yard loan here.
New loan inquiries: hello@yard.com.au
Service requests: help@yard.com.au
We consider your time, your circumstances and your wallet
.jpg)
