In any property transaction, too many purchasers think about tax, financing, and title late in the process. Yet, the choice of legal structure before acquiring property can decisively shape risks, control, creditor exposure, succession, and dispute outcomes.

The recent New South Wales Court of Appeal decision in Mir v Mir [2025] NSWCA 154 underscores how courts scrutinise ownership architecture and reject reliance on informal “family understandings.”

Waiting until after acquisition to decide how to hold property or interpose entities creates multiple risks:

• Tax and duty traps. Each jurisdiction has unique rules for stamp duty, land tax, GST, and capital gains tax (CGT). Transfers or rollovers post-acquisition can trigger duty or CGT events that could have been avoided had structure been planned in advance.
• Financing and security limitations. Lenders often require first-ranking mortgages over titles held in specific forms. Some structures (such as trusts) may complicate financing arrangements.
• Creditor vulnerability. Holding property in an individual’s name exposes assets to that person’s personal creditors, family law claims, or bankruptcy. Poorly designed structures may offer no genuine asset protection.
• Succession and dispute risk. Family relationships and business partnerships evolve. Without embedded succession and exit protocols, disputes can lead to forced sales or contested trustee removals.
• Court re-characterisation risk. As Mir v Mir shows, informal understandings or profit-sharing patterns are not determinative. Courts look to the formal structure – not intentions – when defining legal relationships.

Once property is acquired, restructuring is often costly, taxed, or commercially unviable. Early structure planning is not a luxury; it is a safeguard.

In Mir v Mir, three brothers built a property development enterprise through a complex web of companies, trusts, and unit trusts. When disputes arose, they claimed an overarching partnership.

The Court of Appeal unanimously dismissed the appeal, holding there was no overarching partnership. The court reaffirmed that the parties’ deliberate choice to use layered corporate and trust structures meant they could not later re-characterise those arrangements as a partnership.

The decision delivers several key takeaways for property investors and developers:

• Structure must be formalised, not implied through conduct.
• Parties cannot retroactively impose a partnership over pre-existing entities.
• Assets held through a trustee cannot be treated as partnership property outside the trust deed.
• Exit, succession, and buy-out protocols should be established at inception.

Ultimately, Mir v Mir reinforces that courts will uphold well-designed architecture, even if outcomes appear harsh. They will not rescue parties from their omissions or drafting gaps

Property is durable, but its legal wrapper – entities, trust deeds, and agreements – is flexible only at the design stage. Once title is taken, options narrow dramatically.

Mir v Mir teaches that sophisticated participants cannot rely on informal or post hoc arrangements to override deliberate structures. The court will hold parties to their chosen framework.

In real estate and capital ventures, failure to structure early is not merely an oversight – it is a liability waiting to be litigated.

EdenYork’s Real Estate & Development team advises on the full lifecycle of property transactions – from acquisition strategy and structuring to financing, joint ventures, and asset protection.
We work closely with clients to design entity structures that balance commercial efficiency, tax outcomes, and personal protection, ensuring your investment is future-proofed from the start.

Whether you are acquiring your first development site, restructuring an existing portfolio, or resolving a complex ownership dispute, we provide clear, commercially grounded advice tailored to your objectives.

Written by Michael J Doueihi