All Topics / General Property / Subleasing via a business

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  • Profile photo of StevenSteven
    Join Date: 2017
    Post Count: 189

    Hi all

    I haven’t posted at for a long time. Not sure if this is the best place or if this should be a question posted under “Legal and accounting”.

    I don’t need very specific answers as I understand it is probably a discussion best to be had with Accountants in greater. However, I am interested in finding out if anybody knows others who may have resorted to using similar methods.

    My situation is my family have a property that was initially purchased under our own names. We have since created a company. Now we would like to use the company to manage that IP.

    However, at this stage, we are not very keen to “sell” the property (either in full or partial share) to the company, due to this will attract both stamp duty and conveyancing costs. Therefore, an option that we are thinking is instead of us leasing the property directly to the tenant, what about we lease it to our company and then company in term sub-leases it to the tenants? For example. Instead of us leasing it at $400 per week to the tenant, we lease it to our company at $300 per week and then the company leases it at $400 to the actual tenant? So the idea is from tenant’s point of view, the tenant should deal with the company, not to me or my family members as individuals.

    Again, I don’t need anybody can give very specific advice. But more just to know from a very “high level point of view”, if this is a practice that is more common than we realize? As well as if there are any obvious legal red lines that we are crossing if implement this idea?



    Profile photo of TerrywTerryw
    Join Date: 2001
    Post Count: 16,213

    Yes this is common. But you might have a few tax issues if you are artificially diverting income to a company.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide)

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