I have read about buying property though a company and hope some experienced investors could give some insight to this.
I am not sure if setting a up a company through which to purchase property or to buy as an individual. What is the benefit of through a company? How would you go about doing this?Thank You
There are several plusests including both Asset protection and Taxation benefits of purchasing a property in the name of a Pty Ltd Company.
Normally it is done with the Company being the Trustee but again it all boils down to your own individual circumstances and requirements.
Cost wise you are probably looking at around $920.00 which includes the ACIS fee of $800 plus your Accountants fees for setting up the Company.
Before you venture into a Company structure think of the initial set up and ongoing costs and weigh this up with the benefits of doing so. For our clients many feel that a Trust structure with personal Trustees is often a more financial viable way to proceed in the early stages of investment.
Richard Taylor
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**Lodoc Commercial loans from 7.39%**
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I’d be thinking that a Trust structure would be the preffered option as well rather than just a company?
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorThis will also depend on your goal as a property investor. For example the cost to set up and ongoing fees for a company is not viable for only a couple of IP’s. Make sure you discuss with your accountant.
Good luck!
I agree krs Good luck finding an accountant that fully understands the different Trust structures and benefits..
I went to a seminar where a prominent REA and Investor had his Accountant there.
This person buys IP’s in his own name, I asked the accountant why they didn’t use trusts, he said something similar to “because you cant distribute the losses only carry them forward and *** – Gears” I asked why not use HDT’s, he said “No one uses those anymore” [blink]
I explained the HDT and the Accountant became Interested..and I only have a basic understanding learnt from a couple of books and the forums..
I have a few IP’s now..but if I could do things over I would purchase through the correct structure at the start.
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorThe trouble with using a company is that you lose the 50% CGT reduction and you can only distribute profits to shareholders in accordance with their percentage ownership. The shares could be owned by a trust thought, but you would still lose the discount of CGT.
So you had better look into trusts. At least do some preliminary research
Terryw
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