Trusts acquiring property in Victoria & New South Wales
If you have bought or are planning to buy residential property via a discretionary trust, you could be liable to pay more duty. It all depends on what is in the trust deed.
Changes came into place on 1 March 2020 for trust structures acquiring residential property in Victoria or New South Wales. These trusts will need to check the existing trust deeds which may need amending to exclude any potential foreign beneficiaries.
The changes occurred as the Victorian and New South Wales Offices of State Revenue (SRO and OSR) announced it was changing its stance on the application of duty surcharge to property owned or acquired by family trusts. This could result in paying more tax.
So what does all that mean?
Well most family or discretionary trusts do not specifically exclude potential foreign beneficiaries. This can mean your trust will be a foreign trust for duty purposes resulting in an additional duty of 7% being applied to a property purchase. This can mean extra tax of tens of thousands.
What to do?
Call us before purchasing property in Victoria or New South Wales if you are thinking about purchasing the property in your trust structure. We can work with you to ensure your trust structure is the most appropriate structure to use and whether your deed should be amended.