Hi all,
What are the implications behind buying a share of company in comparison to purchasing the property?
The agent I was speaking to has indicated that I should speak to a solicitor before making my decision.
What would be pros and cons of this purchase?
Cheers in advance.
Marlin
Marlin,
Just to clarify, are you talking about buying a share in company x to purchase property y versus you buying purchasing y individually?
James
Hi James,
I think what he meant was by buying this unit you gain a share within the block of unit rather than owning that specific unit.
Does this make more sense?
Thank James
Buying a company share unit is not so bad if you do your D/D.
They are usually harder to resell, and hence have a lower purchase price to compensate.I don’t know the pros/cons of company share, but it’s better to get something strata titled.
The banks also prefer strata to company share if you are getting finance.
I still haven’t really a clue what Marlin is talking about.
“Agent”. What kind of agent ? Real estate agent ?
Is it buying shares in a company which owns a property and those shares entitling one to occupation of a particular unit (generally described as buying a Company Title unit) vs making an investment in real estate by buying a property ?
Or is it something else ?
If you are referring to a company title unit then I have the following remarks to make :
Generally such units are older style units which mostly are considerably larger than the units being built today.
(Forgetting the size of the company title unit for the moment) they sell at a discount compared with strata title units.
Some (not all) such units may have restrictions placed on them in that one cannot put a tenant in the property.
Generally, in any event one needs permission from the Body Corporate to let to a particular person (permission cannotunreasonably be withheld I would say)
In the past it was extremely difficult to borrow on them. Nowadays banks do accept them as security.
It is no great deal to convert them to strata title units (at a cost of course).
Pisces
Make sure you run a search through sites such as FIDO who have just posted a list (I think of 25) property companies that are being investigated. Can never do too much checking. sunshine
If you are talking about buying the shares in a company that owns the property rather than buying the property itself, then you will not be able to save stamp duty. You will still be charged (same amount I think)
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks everyone for your replies.
I really had no idea what the real estate agent was telling me.
Your replies did have hugh impact on my decision.
Much appreciated.
Marlin
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