Should you own that property personally, in a trust, in a company, or in an SMSF?

Year-1 income tax outcome side-by-side. Income tax is one dimension of the structure decision — CGT, land tax, asset protection, distribution flexibility and lending all matter too. Get the order-of-magnitude here, then talk to your accountant.

Frequently asked questions

Why does this calculator only show year-1 tax — what about CGT, land tax, asset protection?

Year-1 income tax is the easiest comparison to model accurately and is usually the FIRST decision driver. The other dimensions matter enormously and pull in different directions: • CGT discount — personal/trust get a 50% discount on gains held >12mo. Companies get NONE. SMSFs get a 33% discount in accumulation phase. • Land tax — different threshold + rate per state, and TRUSTS often pay land tax from $1 (no threshold) in some states (NSW notable exception). • Asset protection — discretionary trusts protect from personal creditors (subject to clawback rules). Personal name = exposed. • Distribution flexibility — discretionary trusts let you stream income to lower-MTR family members; personal name + company are fixed. • Borrowing — banks lend more comfortably against personal-name properties; trust + company lending is more restrictive + more expensive. This calculator is a STARTING POINT for the conversation with your accountant, not a substitute for it.

Why does the trust column show losses as "quarantined"?

A discretionary trust can't distribute a tax loss to a beneficiary — losses stay locked inside the trust, carried forward against future trust income (subject to the 50% stake / income injection / pattern-of-distribution rules). This is the BIGGEST disadvantage of using a trust for negatively-geared property: you don't get the year-by-year tax saving an individually-held property gives you against your salary. Investors using trusts typically wait until properties are positively geared before transferring ownership, OR use them for cashflow-positive properties from day one.

When does a company structure make sense for property?

Rarely for residential. Companies pay 25% / 30% on income and get NO CGT discount — so a property with strong capital growth gets taxed at the full 30% on its full gain. Discretionary trusts, by contrast, distribute the gain to beneficiaries who CAN claim the 50% discount. Companies CAN make sense for: (a) commercial property where ongoing rental income is heavy and growth is modest, (b) developer-style hold-and-flip where you'd be taxed as a trader anyway, (c) corporate trustees (the company holds the property AS trustee for the trust — tax flows through the trust, not the company). Talk to your accountant — almost no one buys residential investment property in a bare Pty Ltd.

What about an SMSF — is 15% really that good?

On the income side, yes — 15% inside accumulation, 0% in pension. But: (a) SMSF property must be on commercial (LRBA) terms, with a bare trust holding it; (b) you can't live in it, can't rent to family, can't make improvements until the loan is paid off; (c) a residential property can be hard to lend against inside super (LVR ~70%, higher rates); (d) losses are QUARANTINED inside the fund (can't offset your salary outside super). For the right portfolio shape — stable cashflow, long-hold, contribution-rich super balance — it's powerful. For an aggressive growth portfolio with leverage, often not.

Does the calculator model franking credits or trustee fees?

No — those are second-order. Companies passing fully-franked dividends out have a different effective rate at the shareholder level (top-up tax to MTR or refund). Corporate-trustee setups have annual ASIC + accounting fees ($1,500-$3,500/yr typical). For a year-1 comparison at the income level the calculator is accurate to within the rounding error you'd expect from any back-of-envelope model. Real numbers come from your accountant after they see your actual income, family group, and existing structures.