Should you flip houses in a company or trust in Australia?

When a flip starts making real money, the question that follows is almost always the same: should you flip houses in a company or trust instead of your own name? It is a fair question, and the honest answer is that the structure you hold a flip in changes three things: the tax rate you pay, how protected your other assets are, and who the income lands on. But it changes none of the things people hope it will. No structure turns a flip into a tax-free capital gain, and none of them lets a genuine flip claim the 50 per cent CGT discount. So the choice is real, but it is narrower than the forums make it sound.

It is also a decision you make at the wrong end if you leave it late. You pick the structure when you buy, because that is whose name goes on the contract and the title, and unwinding it later means selling and re-buying with a second round of stamp duty. So it is worth understanding the trade-offs before your first serious deal, not after it.

First, the part no structure changes

Start here, because it saves a lot of wasted effort. Whether a flip is taxed as a capital gain or as ordinary income comes down to what you are doing, not what entity you do it in. A property bought to renovate and resell at a profit is generally treated by the ATO as a profit-making activity on revenue account, so the profit is ordinary income taxed at your applicable rate, not a capital gain, and that means no 50 per cent CGT discount even if you held the property for more than a year. That characterisation follows the activity whether you flip in your own name, a company or a trust.

So structure does not change the character of the income. Companies never get the CGT discount anyway; individuals and trusts can, but a genuine flip is not a discountable capital gain in the first place. What structure changes is the rate the profit is taxed at, whether your home and savings are exposed if a deal goes wrong, and, for a trust, who the income can be distributed to. Everything below is about those three levers.

Flipping in your own name

This is where most first flips sit, and for a one-off deal it is usually the right place. There is nothing to set up, no separate tax return, and the profit simply gets added to your other income for the year and taxed at your marginal rate.

The catch is at both ends of that sentence. At the top, a good flip profit stacked on a salary can push you into the top marginal bracket, so a chunk of the margin goes in tax at up to 45 per cent plus the Medicare levy. At the other end, there is no liability firewall: if a builder is hurt, a contract goes bad or the numbers blow out, your own assets are on the line. For a single modest flip that is often an acceptable trade for the simplicity, but it is a real one. Your own name does have one quiet advantage worth remembering: the land-tax threshold, which I come back to below.

Flipping in a company

A company pays a flat rate on its profit: 25 per cent if it is a base rate entity (broadly, aggregated turnover under $50 million and no more than 80 per cent passive income) and 30 per cent otherwise. Next to a top marginal rate of 45 per cent that looks like a large saving, and if you are reinvesting the profit into the next deal it can be, because you keep more working capital inside the company.

But the flat rate is not the end of the story. That 25 or 30 per cent is the company's tax; to get the money into your own pocket you pay it out as a dividend, and under Australia's dividend imputation system the profit is ultimately taxed once, at your marginal rate. The franking credit for the tax the company already paid offsets your bill, so if your marginal rate is above the company rate you pay the top-up, and if it is below you can get some back. In plain terms, a company can defer and smooth tax, but it does not permanently convert a 45 per cent rate into a 25 per cent one once you actually spend the money.

What a company does give you is a clean liability boundary and a tidy structure if flipping is becoming a genuine, ongoing business. Against that, weigh the cost: setup, a separate company tax return, ASIC fees, and an accountant who now has more to do.

Flipping in a trust

A discretionary (family) trust is the structure people reach for when there is a family and more than one deal. A trust is not taxed as a separate entity in the usual way: it is a flow-through vehicle, so the trustee distributes the income to beneficiaries who are each taxed at their own marginal rate. If you have a spouse on a lower income or adult family members with room under the brackets, that flexibility to split the profit can genuinely lower the total tax on a deal, which is the main reason flippers use one.

Two things temper it. First, if the trust retains income instead of distributing it, the trustee is taxed on that share at the top marginal rate, so a trust is not a cheap place to park undistributed profit. Second, and this is new, the Government announced in the 2026–27 Federal Budget a 30 per cent minimum tax on distributions from discretionary trusts, to apply from 1 July 2028. It is not yet law and the detail may change, but it targets the income-splitting benefit that makes a trust attractive here, so it belongs in any structure decision made now.

A trust also gives asset protection and, like a company, does not turn a flip into a discountable capital gain. And it carries the most cost and complexity of the three: usually a corporate trustee, a deed, and documented distribution decisions every year.

Where the state taxes bite (and can decide it for you)

Income tax is only half the picture, and the other half, state land tax and duty, is where a structure chosen purely for the income-tax rate can backfire.

In your own name you get the land-tax threshold, so a single flip on land under the threshold can attract no land tax at all, even if you hold it across the taxing date. Hold the same property in a discretionary trust and, in NSW, it is treated as a special trust that gets no land-tax threshold, so land tax can apply from the first dollar of land value. Worse, a discretionary trust whose deed does not irrevocably exclude foreign beneficiaries is treated by default as a foreign owner and can be hit with foreign-owner surcharge land tax and surcharge purchaser duty. Those are avoidable with the right deed wording, but they are exactly the kind of trap that turns a clever income-tax structure into a more expensive one overall.

The point is not that a trust is bad. It is that you cannot pick a structure on the income-tax rate alone. Run the whole number, land tax and holding costs included, for each option before you decide.

So should you flip houses in a company or trust?

For a first flip or a one-off, your own name is usually the answer: the simplicity is worth more than a rate saving you would largely give back on the way out, and a single deal rarely justifies the setup and running cost.

A company starts to make sense when flipping is becoming a repeatable business and you want to reinvest profits at the flat rate and keep a firewall between the deals and your personal assets. A trust makes sense when there is a family to split income across and asset protection matters, but only with eyes open to the land-tax threshold you give up, the surcharge traps, and the 2028 minimum-tax change coming for exactly that benefit.

None of them is a loophole, and the best structure for the person next to you may be the wrong one for you, because it turns on your other income, your family, how many deals you plan to do, and which state the land sits in. This is genuinely advice-shaped territory, so the honest move is to take your actual numbers to a registered tax agent or accountant before you buy, not after.

How I weigh it up

• Decide it before you sign, because the structure follows the contract and the title, and changing it later means a second lot of duty.
• For a single flip, default to your own name unless there is a specific reason not to.
• If you are going again and again, price a company or trust properly: setup, yearly compliance, and the land-tax and surcharge position in your state, not just the headline income-tax rate.
• Model the after-tax profit for each option on a real deal; the gap is often smaller than it looks once you follow the money all the way to your own bank account.
• Get it checked. An hour with an accountant is nothing against getting the structure wrong on a six-figure deal.

Structure is worth getting right, but it is the last 10 per cent of a good flip, not the first; the margin is still made at the buy. If you want the rest of the picture, the beginner's playbook walks the whole deal, is house flipping profitable puts real numbers on it, and you can run your next deal end to end, after-tax, holding costs and all, before you commit. FlipPro covers NSW, VIC and QLD with live zoning data now; see pricing to get started.

This is general information only and not financial, tax, legal or accounting advice. Company and trust taxation, land tax, duty and surcharge rules are complex, vary by state and change over time. The 30 per cent minimum tax on discretionary trust distributions noted above was announced for 1 July 2028 and is not yet law. Company and trust tax rates and the treatment described here are current at the time of writing and depend on your circumstances. Speak to a registered tax agent or accountant about your own situation before choosing a structure.

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