Declaration of Trust Australia 2025: Guide & Latest Updates

When it comes to managing property and wealth in Australia, few legal tools are as versatile as the declaration of trust. Whether you’re buying a home with a partner, helping a child get on the property ladder, or structuring your estate, a declaration of trust sets out exactly who owns what. With new property and tax rules coming into play in 2025, understanding how declarations of trust work—and why they matter—has never been more important.

What Is a Declaration of Trust?

A declaration of trust is a legal document that clarifies the true ownership of an asset, typically property. It spells out who holds the asset (the trustee) and who benefits from it (the beneficiary). In Australia, declarations of trust are commonly used when:

• Multiple people contribute unequally to a property purchase

• Parents or family members help children buy property

• Partners or friends buy property together

• Assets are held for someone unable to manage them (like a minor or person with disability)

Importantly, a declaration of trust can override the default legal ownership registered on a property title. This means the document can have major implications for tax, inheritance, and property settlements.

Why Declarations of Trust Are Booming in 2025

Australian property prices remain high in 2025, and more buyers are pooling resources to get into the market. At the same time, the ATO and state governments have tightened rules on property-related tax benefits, including land tax surcharges and foreign buyer levies.

Key reasons declarations of trust are gaining ground this year:

• First Home Buyer Schemes: With the 2025 expansion of shared equity programs, many families are using declarations of trust to formalise ownership splits and avoid future disputes.

• Estate Planning: New probate rules in NSW and Victoria mean clear documentation of beneficial interests is essential to avoid delays and challenges.

• Asset Protection: Amid ongoing economic uncertainty, some investors use declarations of trust to separate beneficial ownership from legal title, managing risks linked to creditors or relationship breakdowns.

For instance, consider a Melbourne couple purchasing a $1.2 million apartment. One partner’s parents contribute $200,000 towards the deposit. A declaration of trust can specify the parents’ proportional ownership, ensuring their contribution is protected if the property is sold or the couple separates.

Tax and Legal Implications: What Changed in 2025?

Declarations of trust have significant tax implications—especially with new 2025 rules affecting property and inheritance taxes:

• Stamp Duty: Some states (notably NSW and QLD) now require declarations of trust to be stamped and reported within three months of execution, or risk fines and backdated tax.

• Land Tax: From July 2025, Victoria expanded land tax surcharges for trusts, requiring all trustees to declare beneficiaries annually to avoid higher rates.

• Capital Gains Tax (CGT): The ATO’s 2025 guidance clarifies that beneficial owners (as per the declaration of trust) are liable for CGT, not just the person listed on the title.

These changes mean that failing to get your declaration of trust right—or neglecting to register it—can have costly consequences. For example, if a trust is not properly disclosed, land tax surcharges could be automatically applied, potentially costing thousands per year.

How to Create a Robust Declaration of Trust

Given the legal and financial ramifications, a declaration of trust should be prepared with care. Here’s what to include in 2025:

• Full details of all parties: Names, addresses, and roles (trustee/beneficiary)

• Precise ownership percentages: For example, “John Smith 60%, Mary Jones 40%”

• Clear terms for sale or transfer: What happens if one party wants out?

• Signatures and witness details: To ensure legal validity

• Registration/stamping: In line with your state’s requirements for property trusts

Many Australians are now using digital legal services to draft and register declarations of trust, but it’s crucial to ensure these documents comply with the latest state and federal rules. Remember, a poorly worded or unsigned declaration can lead to costly disputes, especially in blended families or business partnerships.

Conclusion: Declaration of Trust—A Smart Move in 2025

With property ownership more complex than ever and tax rules tightening, a declaration of trust is a practical tool to secure your interests, clarify ownership, and avoid future headaches. Whether you’re investing with family, friends, or business partners, a well-crafted declaration is your best safeguard against disputes and tax surprises.