NSW Land Tax Strategy
Trust Conversion — Investment Property

Converting to a fixed unit trust — the OSR-approved solution

The MGS NSW Land Tax Unit Trust has been approved by the NSW Office of State Revenue as a fixed trust under section 3A(3B) of the Land Tax Management Act 1956 (NSW). As a fixed trust, the property is taxed on the standard individual basis — with the threshold deduction applied — rather than at the flat special trust rate.

This provides certainty about the land tax outcome before the conversion is completed. MGS Private advises on whether the conversion is appropriate for each client’s situation and structures the transaction to minimise or eliminate stamp duty on the conversion itself.

• Annual saving of up to $17,200 per property (subject to land values and annual threshold adjustments)
• NSW OSR-approved fixed trust structure — land tax outcome certain before proceeding
• Unit holders may borrow to acquire units — interest deductibility generally available
• SMSF-compatible — property can later be transferred to an SMSF where eligible
• Asset protection, CGT streaming and all standard MGS Unit Trust features included
• Stamp duty on the conversion must be assessed — MGS Private advises specifically on this
• Individual ownership of the same property cannot later be transferred to an SMSF — a unit trust preserves that option