Should You Buy Property in Your Name or a Company

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Should You Buy Property in Your Name or a Company? Here’s What Business Owners Need to Know

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Introduction: Property Investment in Australia for Business Owners
For many Australian business owners, property investment is a smart step towards long-term wealth. But here’s the million-dollar question: should you buy property in your personal name, or through a company structure?

The decision isn’t just about preference—it can affect your tax liability, asset protection, borrowing power, and even future investment flexibility.

This comprehensive guide explores the pros and cons of each option, unpacks ATO guidelines, and shows how Trinity Accounting Practice helps you make informed choices.

Understanding the Basics: Types of Property Ownership
Before diving into strategy, let’s define your main options:

• Individual Ownership (Personal Name): You, as a person, are the registered owner.
• Company Ownership: A company registered with ASIC owns the property.
• Trust Ownership: A trust holds the property, often with a corporate trustee.
• SMSF Ownership: A self-managed super fund acquires the property under strict rules.

This guide focuses on personal vs. company ownership, with notes on SMSFs and trusts where relevant.

Tax Considerations: How Ownership Impacts Tax Outcomes

Capital Gains Tax (CGT)
One of the biggest differences is CGT:

• Individuals can access the 50% CGT discount if the property is held for more than 12 months.
• Companies pay tax on the full gain—no discount. But the company tax rate (25%) may be lower than the top personal rate (up to 47%).

Example:
You sell a property after 2 years with a $200,000 gain.

• In your name: taxed on $100,000
• In a company: taxed on $200,000

Rental Income Tax

• Individual: Added to your assessable income.
• Company: Taxed at the corporate rate, and profits can be retained for reinvestment.

Negative Gearing

• Individuals can offset property losses against other income.
• Companies can claim losses too, but subject to continuity of ownership rules.

Asset Protection and Legal Risk

Buying in Your Name
Your personal assets, including the investment property, may be exposed if:

• You are sued
• Your business defaults
• You face personal bankruptcy

Buying Through a Company
A company is a separate legal entity, offering asset protection from personal liabilities.
Note: Lenders often require directors' guarantees, which may expose personal assets anyway.

Important: Courts can still access company-held assets in cases involving fraud or illegal activity.

Financing and Borrowing Power

Individuals

• Pros: Easier to qualify, lower interest rates, smaller deposits
• Cons: Full personal liability, borrowing capacity may be limited by existing personal debts

Companies

• Pros: Strong business cash flow helps loan approval, assets stay off personal books
• Cons: Often need director guarantees, higher deposit requirements, fewer loan products

Superannuation and SMSF Rules

Can Companies Buy Property Through SMSFs?
No. Companies cannot hold residential property inside an SMSF.

What About Individuals?
Yes. An SMSF can purchase property, but strict rules apply:

• Cannot be lived in by you or related parties
• Borrowing requires Limited Recourse Borrowing Arrangements (LRBAs)
• Related party transactions must meet market terms

Land Tax Implications

Individuals
Land tax thresholds vary by state. NSW allows exemptions for primary residences.

Companies
No exemptions for principal places of residence. Land tax is typically higher for company ownership.

Tip: Check your state’s revenue office for current rules and thresholds.

Succession Planning and Exit Strategy

Personal Ownership

• Pros: Simpler inheritance via will, possible CGT concessions
• Cons: Probate delays, potential family disputes

Company Ownership

• Pros: Shares can be transferred easily, cleaner asset sale or transfer
• Cons: CGT still applies, ongoing compliance obligations

Costs and Ongoing Compliance

Personal Ownership

• Lower setup cost
• Individual tax return
• Basic property management and reporting

Company Ownership

• ASIC fees
• Separate tax returns
• Additional accounting and legal work

Trinity Accounting offers bundled packages for tax compliance, structuring, and ASIC management.

Trusts: A Hybrid Option?
Some investors choose discretionary trusts with corporate trustees to:

• Split income
• Improve asset protection
• Reduce CGT through distributions
• Retain land tax concessions

Trusts require expert setup and advice due to complexity.

So… What’s the Best Structure for You?
It depends on:

• Your current tax bracket
• Risk exposure and asset protection needs
• Investment timeline
• Estate and succession goals
• Land tax and super strategy

Real-World Example: How Trinity Helped a Business Owner
Michael, a builder from Sydney, wanted to invest in commercial real estate.

We helped him:

• Establish a company with a discretionary trust
• Minimise tax on rental income
• Protect personal assets
• Plan succession by transferring shares to his children

Whether you are in construction, hospitality, healthcare, or retail, we tailor your strategy.

Final Word: Let Trinity Accounting Practice Help You Invest Wisely
Buying your first or next investment property? The right structure saves tax and protects your wealth.

We help with:

• Tax structuring
• Property and business accounting
• Asset protection
• SMSF and trust setup
• Lending and finance advice

Book your consultation today
https://calendly.com/ramy-hanna

FAQ: Property Ownership for Business Owners

Q: Can I change the ownership structure after buying?
Yes, but this may trigger stamp duty and capital gains tax.

Q: Can my company buy my office and rent it back to me?
Yes, but it must be rented at market rates and disclosed properly in tax filings.

Q: Can an SMSF buy residential property?
Yes, but only under ATO rules and the property must serve retirement investment purposes.

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