Buying a Property in a Trust in WA: What Can Go Wrong

A little while ago, we had a client come to us after signing a contract to purchase a property in Perth. On the surface, everything looked fairly straightforward. He was purchasing the property through a trust structure. But as we started reviewing the contract, a major issue became clear.

The entity listed on the contract… didn’t actually exist.

He hadn’t sought advice from his accountant or financial planner before signing. Instead, that conversation happened afterwards, and by then, it was too late to simply “fix it”. What followed (before we could intervene) were two contract variations attempting to correct the entity, each adding more complexity to an already messy situation. Ultimately, the transaction had to be sent to RevenueWA for manual assessment.

He was lucky. He avoided additional duty.

But it could have gone very differently, including the potential for double transfer duty.

And this situation is far more common than you might think. Almost every month, we have buyers who use the wrong entity on the contract or, after talking to their bank, need to swap out the purchasing entity for one that meets the lender’s requirements. And in all of these cases, there is additional stress, paperwork, and often cost to correct the details.

Why people buy property in a trust or SMSF

Before we get into what can go wrong, it’s worth acknowledging why buyers choose these structures in the first place. Common reasons include:

• Asset protection

• Tax planning

• Estate planning

• Investing through an SMSF

• Business or commercial ownership

These can all be valid strategies when structured correctly (and with the right financial and legal advice).

The key issue is this: The legal entity buying the property must be correct at the time the contract is signed. Speak to your settlement agent before you sign the contract if you're not sure whether the entity is correct.

Why getting the entity wrong is a big deal when buying a property in a trust in WA

Western Australia’s Duties Act is strict. Unlike some other states, there is very limited flexibility to correct errors after a contract has been signed. If the buyer entity is wrong and needs to be changed, RevenueWA may treat this as a new transaction, which can trigger additional transfer duty.

In simple terms:

• First duty = original contract

• Second duty = transfer to the “correct” entity

That’s how buyers can end up paying duty twice.

What is a substituted purchaser (and why it matters)?

Changing the buyer after a contract is signed is known as a ‘substituted transferee’ (also called ‘substituted purchaser’). In some cases, this can be done without additional duty, but only if the new buyer falls within very specific qualifying relationships.

For example, you could add your spouse or your child as an additional buyer post-contract, but prior to settlement, without incurring any additional duty as they are related to you. When we look at companies or trusts, a corporation may be considered related if:

• The purchaser is the sole shareholder, or

• All shareholders are individuals with qualifying relationships to the original

However, the ‘qualifying relationship’ rules are narrow and technical.

And importantly: A trust structure (especially discretionary trusts) will often NOT qualify as a related party.

This means if you switch from an individual to a trust, add a company or otherwise introduce a new structure… it may trigger reassessment and additional duty.

You can read more about this in the official RevenueWA guidance on substituted transferees.

SMSFs and the “chicken and egg” problem

A particularly tricky area is when buyers seek to purchase a property through a Self-Managed Super Fund (SMSF). Without the right state-specific advice before entering into the contract, it can become quite a costly exercise to ensure the correct entity ultimately purchases the property.

A fellow WA conveyancer, Valerie Haskins, recently shared a great post on LinkedIn about the strict requirements for structuring these transactions. If borrowing is involved (via a Limited Recourse Borrowing Arrangement or LRBA), the property must be purchased through a bare trustee and bare trust.

Here’s the problem:

• The Bare Trust must exist before or at the time of signing the contract

• But many buyers are told to only set it up after they’ve found a property, so that the trust deed can specifically reference the property

This creates a “chicken and egg” scenario.

A practical approach, and one suggested by Valerie in her LinkedIn post:

• Register the bare trustee company early

• Prepare the bare trust deed in advance of the contract being signed

• Ensure the bare trust deed is finalised and executed on the same date as the contract to purchase the property

For a helpful comparison of requirements across the various states in Australia, see the SMSF Australia website.

Common mistakes we see when buying a property in a trust in WA

These issues come up more often than you might expect. Here are some of the common mistakes we see buyers making when buying a property in a trust in WA:

• The trust or company doesn’t exist at contract date

• The wrong entity name is used

• Trust structures are incomplete

• Interstate advisors provide advice that doesn’t align with WA rules

Each of these can lead to delays, manual assessment by RevenueWA, additional legal costs and potential double duty.

Why WA-specific advice matters

One of the biggest risks is relying on advice from professionals who primarily operate in other states. The rules around Transfer Duty, substituted transferees, and trust structures vary significantly across Australia.

What might be acceptable in NSW or Victoria may not be acceptable in WA. That’s why it’s so important to ensure your advice is WA-specific and provided to you well in advance of making an offer on a property.

If you’re considering buying property in a trust or company, your advisory team should include:

• Accountant: To confirm the correct structure and tax implications.

• Financial planner: To ensure the purchase aligns with your broader strategy (especially for SMSFs)

• Conveyancer: To ensure the contract is written correctly and compliant with WA requirements

• Finance broker: If lending is needed, to confirm the purchasing entity meets the bank’s requirements

Getting these four aligned before signing can save significant time, stress, and cost later.

FAQ: Buying property in a trust or SMSF in WA

Can I change the buyer name after signing a contract in WA?

Sometimes, but it depends on whether the new buyer is considered a related party. If not, additional duty may apply.

Can I buy property in a trust in WA?

Yes, but the trust must be correctly established before or at the time of signing the contract.

What happens if the wrong entity is on the contract?

The transaction may need to be reassessed by RevenueWA and could trigger additional duty.

Do I need a bare trust before signing an SMSF contract in WA?

Yes. The correct structure must be in place at or before the contract date.

Can I add my partner after signing a contract?

In most cases, yes, but only if the relationship qualifies under strict RevenueWA rules.

The bottom line when it comes to buying a property in a trust in WA...

Buying property through a trust or SMSF can be a smart strategy, but only if it’s structured correctly from the outset. In WA, there is very little room to fix mistakes after a contract has been signed. Getting the entity wrong isn’t just an administrative issue - it can have real financial consequences.

If you’re considering buying property in Perth through a trust or SMSF, the best thing you can do is get advice before you sign.

North Shore Conveyancing supports buyers across Perth with practical, WA-specific guidance to ensure your contract is set up correctly from day one. If you’re preparing to make an offer and want to avoid costly mistakes, contact Katelyn for clear, upfront advice before you sign.