Your wife would have to be on the home loan as she is on title.

With the trust, the loan would usually need to be in the trust name with guarrantees from the trustee (or directors of the trustee company). So this would depend on how you have set the trust up.
Hi Terry, I believe one of the knowledgeable trust accountants prefers the loan in the individuals name and the Hybrid Discretionary Trust (with Pty Ltd Trustee)as gaurantor (though I guess each situation is different).. Some Trust advisors prefer a normal discretionary trust and company
ANZ have recently caused problems with one of my clients with a HDT – They refused to put the loan in the person’s name (director of the trustee).
I’ve heard Bankwest are easy to deal with re: Trusts and Investing?

It seems they sometimes do and sometimes don’t.

If you wish to maximise tax benefits, maybe yourself and your wife could enter into a loan agreement with yourself or your trust. SO you wboth borrow the money from ANZ and then on lend it to the trust/trustee. that way interest deductibility may be transfered.
I thought this was a good option, you buy units in the HDT and it repays the loan (would it repay at a commercial rate say, a% higher than the other loan?)

Terryw
Discover Home Loans
North Sydney
[email protected]

Some of my clients do have an additional trust at the top being a unit trust. The units are then issued to the hybrid discretionary trust and special income units issued to the appropriate individuals. The benefits of this structure, although slightly more complex, is to allow the asset to be transferred to a SMSF at a later stage (note if residential property is held in a HDT then it cannot be transferred to your SMSF). The other advantage is with respect to possible stamp duty savings.
Hi Coasty, what then are the benefits in having your properties in a SMSF?Would they have to be + Geared as well to be in the SF?

With respect to costs if someone is charging $1,200 then they are loosing money. ASIC charges $800 for registration fees and a lawyer will be charging around $400 – $600 for the trust deed. If the accountant is merely copying past deeds and not preparing new ones by a qualified lawyer then they are in breach of copyright. Accountants are not allowed to prepare legal deeds. I think $2,500 for establishing a company AND a trust (excluding stamping costs) is quite reasonable and comparative for providing advice re structuring, establishing the structures, applying for tax file numbers and completing the appropriate resolutions. Did the accountant also consult with you on the structure, apply for appropriate registrations, deal with the appropriate resolutions, etc. If they did then I would argue they made nothing on setting up the structure for you. Id be concerned about an accountant who establishes something for nothing. In my view they are either poor (i mean if they keep doing things for cost then how will they ever make money) or they make it up through higher ongoing accounting fees for preparing the accounts, etc. Ive seen some trusts setup for $400 and the ongoing compliance costs are around $1,200 – $1,500 per annum (with one investment property in them). This can be done for around $500 so you might get caught out later on. If however they have decided to give their time away then good on them. Im not a registered charity so wouldnt even deal with someone who wanted to setup such a structure for $1,200.
Most costs to establish a Trust (HDT) I’ve heard of are around $2,500 -$3,000 and one of $1,900 but with $900 per annum accounting costs..

Why would you want to hold property in a unit trust with all the units being held by the individual? It provides no flexibility with respect to distributions of profits when the investment becomes positively geared. It might be good while negative gearing but what if the person obtaining the negative gearing benefits looses their income and you want the partner to then gain the benefits. If you transfer the units then CGT will payable on the difference between the market value and cost base of the units. This can be effectively managed through the use of HDT and the issue of special income units. Also as CATA stated it provides poor asset protection. The units could be held by a discretionary trust but then the individual would loose the negative gearing benefits. If however the units were held by a hybrid discretionary trust then its a different matter.

Cata just one issue. A trust cannot be sued. It is the trustee of the trust that is sued in the case of litigation. That is why a corporate trustee is the preferred entity, with the company holding nothing more than issued capital (for two shareholders this would be $2 issued capital) and for greater security a sole director.
Coasty, what do you mean by holding the issued capital (i.e How is this done within the company?) I presume this would then be the only distribution in the company? Does the director of the company have to be (or be prefered to be) different to the director/appointer of the trust?