How to Choose Between Personal, Trust or Company for Geared Property

When you buy a geared investment property from 2026 onwards, the choice between personal name, trust or company now changes your borrowing power, after‑tax cashflow, asset protection and exit options more than ever. With many negative gearing benefits on established properties shrinking or disappearing, the “best” structure is rarely about chasing deductions; it’s about matching risk, time horizon and lending reality to the new rules.

In practice, most everyday investors still end up buying geared property in personal names, with trusts and companies reserved for higher‑risk, higher‑wealth or business‑linked situations. This guide walks through how the 2026–27 reforms interact with each structure, so you can narrow your options this week and head into a coordinated tax + lending meeting with the right questions.

Different ownership structures change tax, risk and borrowing power in different ways.

1. The new rules that change the ownership decision

1.1 What actually changed for geared property?

The 2026–27 reforms do three big things that affect structure decisions for residential investors:

1. Negative gearing limits: For many established residential properties bought after 12 May 2026, rental losses can no longer be used to reduce salary or business income. They are quarantined to rental income and rental property capital gains only (Treasury Laws Amendment (Tax Reform No. 1) Bill 2026; Budget 2026–27 commentary). This reinforces earlier guidance that new deals should be modelled assuming no benefit from negative gearing on established dwellings.
2. CGT settings: From 1 July 2027, most individual and trust investors lose the simple 50% CGT discount and instead face indexed gains with a 30% minimum tax on real gains for residents. The relative tax gap between individuals, trusts and companies shrinks.
3. Trust minimum tax and reporting: Discretionary trusts face tighter minimum tax and extra reporting, especially on undistributed income and cross‑family streaming.

Commercial property and large‑scale or institutional housing structures are less affected, but the practical message for mum‑and‑dad investors is: you can no longer assume the Tax Office will co‑fund a loss‑making investment.

For new decisions, that means:

• Test every geared deal on a pre‑tax basis and assume little or no negative gearing benefit, especially for established stock.¹
• Let structure be guided by risk, serviceability and exit strategy, not just headline tax rates.

1.2 Individual vs trust vs company: the 10‑second snapshot

Here’s the high‑level trade‑off for residential geared property:

• Personal name: Usually best borrowing power, simpler tax, lower ongoing costs. Still often the best option for the family home and many first or second investments.²
• Discretionary / family trust: Better for asset protection and long‑term income streaming, but more complex, higher land tax risk and, after reforms, much weaker negative gearing upside.³
• Company: Useful for some business‑linked property and high‑risk occupations; flat tax rate on retained profits, but no CGT discount, and borrowing can be harder.

The right call depends on:

• What you’re buying (home vs investment, residential vs commercial)
• Your risk profile (profession, business exposure)
• Your time horizon (5, 10, 20+ years)
• Your borrowing needs and buffers

2. Owning geared property in personal names

2.1 When personal ownership usually still wins

For many households, personal name ownership still makes the most sense, particularly when:

• You’re buying your own home (main residence CGT exemption and land tax concessions are powerful).[^ main]
• You’re buying your first or second residential investment, and need maximum borrowing power.
• Your risk profile is moderate, and you don’t run a high‑risk business or profession.
• You want minimal complexity and admin.

[^ main]: See /insights/buying-home-personal-vs-company-vs-trust-australia for why the main residence is usually best in personal names.

Lenders typically:

• Offer higher LVRs (up to 90–95% with LMI, subject to policy) to individuals than to many companies or trusts.
• Use simpler serviceability models for PAYG borrowers.
• Are more comfortable with standard P&I loans and offsets in personal names.

2.2 How the new negative gearing rules hit individuals

Individuals have traditionally relied heavily on negative gearing. Under the reforms:

• Rental losses on many established properties purchased after 12 May 2026 cannot be offset against salary or other non‑rental income.
• Those losses can only be used against rental income or rental property capital gains, and excess losses can be carried forward for future years.
• Some new builds still get more favourable treatment, but definitions are technical and subject to later regulations.

The practical response is the same principle we’ve repeated across the hub: test each property on the basis of zero negative gearing benefit, and see if it still fits your household cashflow.⁴

Worked example – individual buying a unit

• Purchase price: $800,000 established unit
• Loan: $640,000 (80% LVR), 6.5% p.a. P&I, 30 years
• Annual repayments ≈ $48,600 (about $4,050/month)
• Rent: $750/week = $39,000/year
• Other costs (rates, strata, insurance, maintenance, property management): $10,000/year

Net cash position before tax:

• Rental income: $39,000
• Less interest component (approx first‑year interest $41,000) + other costs $10,000
• Net loss ≈ $12,000

Under old rules, that $12,000 could typically offset salary income. Under the reformed rules for many established properties, you need to assume this loss only reduces future rental income and property gains, not your salary this year.

So your after‑tax household cashflow needs to sustain roughly $1,000/month out of pocket, without expecting the ATO to chip in. That’s a structure‑agnostic reality check.

2.3 Pros and cons of personal ownership

Personal names often win by default. You only move away from them when you have a positive reason: material asset protection needs, business integration or advanced estate/succession planning.

Start with cashflow and borrowing power, then choose the ownership structure that fits.