Can a trust boost my borrowing power for more investment properties?

J

jumbocee

New Member
Hey lads after some advice heading forward to get more properties and finance structures.

I’m wondering if putting my properties in a trust would help free up borrowing power which I’m struggling with currently.

Any ideas or suggestions would be appreciated.

I’m 25 currently got 2 properties worth around $2.1m with about $1.2m mortgage debt.

Income is $227k/yr with $70k in super and wife is a stay at home mum at the moment with a new Bub, she has $45k in super. 3 kids total.

PPOR worth $1.1m owing $810k.
IP worth $980k owing $405k.
Rental Income - $700/w make roughly $13.5k net yearly which my wife claims as her income so we don’t pay tax on it.

I have investment bonds set up for each kid with $2300 in each currently and $100/m deposit per kid. They don’t take control until they are 25yrs old.

Any tax deduction advice on this would be good.

I have a $98k car loan (terrible financial decision but love!the car for the family)

TIA
 
Borrowing power for non trading entities usually a little lower than borrowing in your individual or joint names. The calculators have different types of sensitivity on them. Worth a shot, though, looking into.
 
Don't assume that holding assets in a trust reduces your exposure to debt and repayments. Outside of SMSF assets, there's no blanket rule that trust held assets and liabilities help your personal borrowing power.

Ultimately, as director or guarantor, you're the responsible party. If the entity can't make its repayments, you need to be able to. Liabilities in companies and trusts still need to show proof of repayment capacity. That's the general rule.

That said, each lender handles things differently. The real question isn't about existing assets; it's about what you're trying to do in the future. Tyring to move existing assets out of your name can be very costly and may not ultimately benefit you. Your accountant can give you far better advice for both now and the long term.

I'd suggest contacting an investment broker to review your position and help plan a way forward.
 
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