Urgent Warning! A Shocking Trust Loan Ban. End of the Property Get-Rich-Quick scheme. EP116
Australia's fifth-largest bank, Macquarie, halted all new home-loan applications using trust (trust) or company structures (company structure)—no warning, no grace period, just a clean cut. Is the strategy of using trusts to lift borrowing and buy more investment properties finished? Macquarie holds 5.9% of the market with $141.7 billion in loans. A player this size quitting trust lending signals the rules are shifting. Insiders warn others may follow. If you hold investment properties in a trust or company, or you're planning to use the structure to buy a third or fourth property, what should you do next? If lenders line up behind Macquarie, could this path be blocked entirely? Watch this episode to get ahead of 95% of investors—and know how to respond.
A Sudden Change Shocks the Market
Let’s first take a look at the timeline, because it moved really fast. Monday, 28 October: Macquarie emailed mortgage brokers, saying, “Effective immediately, we’re limiting each customer to one trust or company-structure loan.” Many brokers figured it was just a tighter policy—still workable. Wednesday: another email, tone reversed. “From 31 October, we’re suspending all new trust and company-structure loan applications.” In under 72 hours, it jumped from “limit” to “full suspension.” By Friday, the policy took effect. Applications lodged by 30 October would face an “enhanced assessment,” and from 31 October onward, no new applications would be accepted.
As the news broke, a lot of property investors got a shock. One investor wrote on social media, “I spent thousands on a trust, and now the bank’s out? How is that fair?” Trust and company-structure loans are about 5% of Macquarie’s loan book. Not large, but the niche is small; with the main trust-lending player stepping away, half the route is effectively blocked.
Brokers and investors now fear other lenders will follow—and that it’s only a matter of time. Macquarie saw the shift and exited early to simplify its book. It left asset finance last year; now it’s cutting trust lending to focus on “simpler, lower-risk” personal loans. In short, the bank is bracing for tighter policy and a softer economy, lowering risk in advance. That’s the real warning sign.
Three Reasons Revealed
Social Media
Macquarie’s broker email pointed straight at social media: too many “finfluencers” teaching how to use trusts and companies to boost borrowing—broadcasting a leverage workaround banks had broadly tolerated. On TikTok and Instagram, creators show how to stack trusts to bypass personal caps and buy a third, fourth, even tenth property. A 29-year-old investor, Sanjay Parasher, reportedly bought 37 properties in three years, worth $13 million, via company structures. Others claim they “used trusts to grab a bunch of properties fast.” If they succeeded and banks cooperated, it suggests compliance. The issue is, Macquarie was named by some finfluencers as the easiest for this kind of trust loans. Perhaps Macquarie executives felt exposed.
Approval Pressure Off the Charts
Those posts drew millions of views. The wave that followed flooded Macquarie with trust-loan applications. Credit teams were stretched, turnaround lengthened, and customer experience suffered. Macquarie’s hallmark is speed—approval often under 24 hours. Over the past year, trust/company applications spiked so sharply that Macquarie couldn’t keep pace.
Economic Downturn and Anti-Money Laundering
If inexperienced, unguided investors secure these loans and buy properties in bulk. It's OK in a good market. But when rates rise, prices slip, and rents stall, heavy leverage can break cash flow and push defaults. Trusts and companies are complex, making recovery harder. Macquarie likely wants that exposure lower.
Another factor: AML Tranche 2 lands in July 2026, targeting lawyers, accountants, and real-estate agents. Austrac will demand stricter KYC on trusts and companies, and can examine records to trace funds. For banks, that’s a headache. Given the small share of such mortgages, exiting is a better option because it reduces the compliance burden.
There are also whispers that ASIC and APRA are pressuring banks. Insiders say regulators asked lenders to consider stopping these loans. Investment lending is now 40% of housing credit, back to the 2017 peak. Regulators think the investment loan market is too hot, and want to cool it a bit—starting with trust and company loans. The impact on banks is small, but it chills the market.
Macquarie’s move is seen as a response to finfluencers, but the deeper driver is cutting compliance costs. Now that we've found the reason for Macquarie's exit, what’s next for lenders, investors’ access to credit, and Australia’s property market?
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Impact on Credit and the Property Market
Macquarie used to be the fastest, friendliest bank for trust/company loans—sharp rates, simple steps, 24-hour approvals. Now it’s out, brokers have no choice but to go to other banks. Those lenders are slower, stricter, and pricier. Brokers will spend more time on documents, and approvals may blow out from one day to a week or more. Many brokers will simply avoid trust loans, so trust-loan investors will likely meet more brokers who won’t take them.
If you’re an investor with several properties, the impact is real. Many use trusts or companies to bypass personal caps. Example: your personal loan limit is $1 million; with two trusts at $800k each, you access $1.6 million. With that route blocked, you may miss a third or fourth purchase. Even with another bank, you could wait for weeks before you get the loan. In a rising market, a week’s delay can cost you the opportunity for a good purchase.
If you borrow in your personal name, the bank looks at your income cap, not distributions from a trust. Personal borrowing typically tops out at about 5–6× annual income. Buying in your own name also can’t deliver asset protection. If you go bankrupt or get sued, property held personally can be pursued.
Investors who use trust/company structures usually have many properties. Constrained borrowing means fewer buyers in the market. That could ease competition for entry-level and mid-priced properties and slow price growth in the short term. On the other hand, developments funded via trust structures—commercial or mixed-use—may face tougher scrutiny, which could trim future housing supply.
The good news: this isn’t a full-blown trend yet. Apart from Macquarie, the banks that used to do trust/company loans are still doing them. But if more lenders follow, the “use trusts to build a multi-property portfolio” play could be rewritten. Those relying on complex, leveraged structures may be forced out.
For now, there’s no impact on borrowers with already approved trust loans or settled properties. Macquarie has limited only brand-new applications; existing approvals are fine. But if you’ve established—or are about to establish—a trust and plan to buy, move quickly. While policies aren’t uniform across the industry, secure your loan and purchase now—don’t wait until every bank copies Macquarie. Using trusts to boost borrowing is still viable, though the trend is tightening. Should you abandon the strategy? I don’t think you need to. If your deposit is ready, trust loans are still available at the time, and the property you like is a good one, then go ahead and buy it. Once approved, you’re through the gate—banks don’t revisit already issued approvals.
Finfluencers
We still have some time, so let me talk a bit about “finfluencers.” I’m not one, but I do run social media accounts, so it relates to me.
A well-known nonprofit group in the property-investment space published an open letter in September, calling out a few “bad habits.” It said buyer’s agents, mortgage brokers, and even accountants sometimes use inappropriate methods and wording in promotions. Macquarie’s decision likely took that letter into account.
1.Hyping unverified investment returns and cherry-picking the most flattering calculation methods. Think of how often you’ve seen a buyer’s agent claim they secured a bargain with sky-high rent and big gains in just a few months—without naming the property. I understand the need to protect client privacy, but you can’t verify or falsify it. It becomes a matter of belief.
2.Promoting the idea that “the main reason to buy an investment property is tax benefit,” and arguing that, versus buying a home to live in, the tax savings make the overall return better. I agree with the first half—your main goal shouldn’t be tax benefits—but tax is definitely one of the key reasons. Owner-occupier loan interest isn’t tax deductible, there’s no negative gearing, but there’s a principal-residence CGT exemption. Investment-property loan interest is deductible, you can use depreciation for negative gearing, and CGT can be halved. Each path has pros and cons. For people on tight budgets, rather than compromise on a home to live in, renting and buying an investment property can work better—more flexible if you change jobs, and it puts your money to work. For high-income earners, buying brand-new investments for tax planning suits well if the property has steady growth with decent cash flow, and then it’s fine. In our cases, skipping a home to live in and going straight to an investment has delivered stronger overall returns. I don’t see the basis for that nonprofit’s criticism.
3.This one deserves the most attention. ASIC has stated that advice on “establishing entities that influence investment decisions or financial outcomes” may constitute “financial product advice,” which requires an Australian Financial Services License. AFSL.
First, let’s be clear: advice on Australian residential property investment isn’t “financial product advice,” because property isn’t a financial product. In theory, anyone can give anyone advice about residential property.
Second, I asked a few AIs—ChatGPT, Grok, and Gemini—and their answers aligned. In short: (1) Recommending that a buyer set up a family trust and use it to borrow for property investment isn’t “financial product advice,” because family trusts, property, and mortgages aren’t financial products. Mortgages are credit products and require a Credit Licence, which compliant mortgage brokers hold. (2) Recommending that a buyer set up an SMSF and borrow to purchase property is “financial product advice,” because an SMSF is a financial product. We’ve long had a solution for that.
AusPropertyStrategy can’t provide personal financial advice, entity setup advice, or tax-planning advice. That’s why we integrated mortgage strategists, accountants, legal advisers, and AFSL-licensed financial planners into our VISION membership service. In the journey of property investment, when there is a problem, professionals resolve it. For SMSF matters, we always refer clients to a qualified financial planner—of course, it’s ultimately the client’s choice whether to proceed.
Our monthly webinar the “APS Market Insights” series is happening tomorrow, 6th November at 8 PM Sydney time. In this live session, we’ll break down everything that’s been happening in the Australian housing market throughout October, including key trends, local economic fundamentals, and what’s happening globally that could affect property prices in Australia. We’ll wrap up with a live Q&A. Seats are limited, so make sure to register now on our website — or just click the link in the description below.
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