It is indeed possible to buy a house through a trust.
Starting a trust can be quite costly but purchasing a property through a trust has certain advantages that arguably outweigh the cost.
A trust is a vehicle for asset protection. Assets in a trust are not owned by the trustees or the beneficiaries, which means that the creditors of trustees or beneficiaries have no claim against the trust. More often than not, the trust founder’s children are beneficiaries, and they obtain the benefit of using the assets if something happens to the trust founder.
If trustees wish to purchase additional property outside of the trust, such as a house, this property will be registered in the name of the trust and not the trustees. If the purchase of the house needs to be financed by a bank, the trustees must have the authority to purchase property in the name of the trust, borrow money for the purpose of buying property, and the authority to encumber trust assets as security for the duty of the trust.
Buying a home in a trust as opposed to in your individual capacity has its pros. For instance, if an individual dies then the trust and the house owned by the trust continue. If the property is in the individual’s name, it will become part of his/her estate and the beneficiaries and executor will decide what must happen to the house based on the deceased’s will (i.e. should it be sold, how will the money be divided among the heirs, etc.).
Any repairs, maintenance, water bills, or other such costs will be for the trust’s account. Furthermore, since the property is not registered in a person’s name, the value of the personal estate upon death is decreased, which would result in a reduction in your estate duty exposure.
The income tax rate for all trusts is 40%. The Capital Gains Tax on the growth of the value of a property comes into a play once a property is sold. It may therefore be more favourable to buy a property in your individual capacity rather than through a trust.
Another con of the trust owning the property is that the founder does not enjoy control over that property, because the trust will be the legal owner of the property and the trustees will have the power to administer it.
Deciding whether to buy a house through a trust or through your individual capacity is entirely up to you. It is important that you consider your financial standing, as well as the stability of the trust, before making your decision.