Buying your home in a unit trust or company: when it actually works

Owning your home through a unit trust or company sounds clever: “I’ll protect the house from business risk and maybe get some tax benefits.” In practice, it almost always makes life harder and more expensive.

For most Australians, buying the family home in a unit trust or company does not improve tax, rarely gives the bullet‑proof asset protection you imagine, and makes lending more complex. It can work in narrow, higher‑risk situations – but only when you understand the trade‑offs clearly.

This guide is written so you can decide, this week, whether to keep things simple or book proper advice before signing anything in an entity name.

1. Quick answers: should your home sit in a unit trust or company?

For 90–95% of people, the answer is no.

In Australia, interest on a loan used to buy your main residence is generally not tax‑deductible, even if a unit trust or company is on title.[9][10] You also usually lose:

1. The full main residence CGT exemption on sale.
2. Main residence land tax concessions in states like NSW.
3. Simple, cheaper home‑loan products that assume personal ownership.

At the same time, lenders nearly always:

• Assess borrowing capacity based on your personal income, and
• Require personal guarantees from the adults benefiting from the home.

So you carry similar personal risk, but with worse tax and more complexity.

Buying in a unit trust or company may be worth exploring if:

• You are a high‑risk professional or director with meaningful litigation risk.
• Your business balance sheet will eventually own the property for commercial reasons.
• You need a clear, pre‑agreed succession or split of ownership (e.g. blended families, siblings sharing a property).

Everyone else is usually better off owning the home in personal names, with smart structuring around guarantees and other assets. For a comparison with discretionary trusts, see /insights/discretionary-trust-own-family-home-asset-protection-tax.

2. Why people consider a unit trust or company for the home

2.1 The common goals

When clients ask about putting a home into a unit trust or company, they are usually chasing one or more of:

• Asset protection from business risk – “If my company is sued, I don’t want to lose the house” (or the reverse: “If my business blows up, I want to keep the house safe”).
• Perceived tax advantages – “Can I claim the interest if the company owns it?”
• Succession planning – “I want my kids/partner/siblings to inherit in fixed shares without messy estate disputes.”
• Family fairness – “Child A lives in the house; I want Child B to own a clear share too.”

These are all reasonable goals. The problem is that unit trusts and companies are blunt tools for a family home.

2.2 What a unit trust actually does (in home‑owner terms)

A unit trust is like a property co‑ownership wrapper:

• The trustee is on title.
• People (or companies) hold units, which represent their share of the trust’s assets.
• Income and capital can usually be allocated according to unit holdings.

For an investment property portfolio, this flexibility can help parcel ownership or succession. For a main residence, the ATO and state revenue offices care less about the wrapper and more about how you use the property.

2.3 What a company actually does

A company is a separate legal person. It can:

• Own property.
• Borrow money.
• Be sued.

Directors manage it; shareholders own it. If your company owns your home:

• The company is on title.
• You live at the property under some form of licence or lease.
• You usually pay for rates, insurance and utilities personally.

From a tax point of view, this looks like a company giving a private benefit to shareholders/directors, which raises Division 7A and fringe benefits issues, not deductions.

Different ownership structures change tax, lending and asset protection in very specific ways.

3. Tax reality: why a unit trust or company rarely helps your home

3.1 Interest deductibility follows purpose, not name on title

A foundational rule we rely on across many articles is that interest deductibility depends on how the borrowed funds are used, not which property secures the loan or which name is on the title.[2][8]

Applied to your home:

• If the loan funds are used to buy a main residence you live in, interest is not deductible, even if a unit trust or company is the legal owner.[9][10]
• If the loan funds are used to buy an investment property, interest is potentially deductible, regardless of ownership – but then it’s not your main residence.

So the common idea “If I put the home in the company, I can claim the interest” is generally wrong.

3.2 CGT: main residence exemption vs entity ownership

Individuals and certain spouses can usually claim a full or substantial main residence CGT exemption when selling the home, including under the six‑year rule in many cases.

When a company or unit trust owns the home:

• The entity is generally treated as owning a CGT asset used to provide private accommodation.
• It usually cannot access the individual main residence exemption in the same way you can.
• Over 20–30 years, that can mean a six‑figure or seven‑figure CGT bill on a high‑value home.

The 2026–27 Federal Budget’s tightening of CGT concessions on investment property and some trust structures (per CPA Australia’s analysis) only increases the risk that complex structures face more scrutiny and higher effective tax.

3.3 Land tax: main residence concession vs entity penalties

In NSW and several other states, the principal place of residence (PPR) is either exempt from land tax or heavily concessioned if owned by individuals.

If a company or most unit trusts own the property:

• The PPR concession often does not apply, or applies only in narrow, hard‑to‑qualify situations.
• Land tax can easily run into $5,000–$30,000 per year on higher‑value properties.
• Over 20 years, that can be another six‑figure drag.

We explore these trade‑offs in more detail in the land‑tax‑focused piece /insights/discretionary-trust-own-family-home-asset-protection-tax.

3.4 Division 7A and fringe benefits complications

If a company owns the home and you (as a shareholder/director) live in it:

• The ATO will typically treat your occupancy as a taxable benefit.
• You may face Division 7A deemed dividend issues or fringe benefits tax (FBT) complications.
• Cleaning this up each year requires specialist tax work.

Put bluntly: for a normal family home, you are trading clean, simple tax settings for messy, ongoing compliance.