buying property with correct structure

[ml320]

Hi Guys

You can probably tell by the questions that I am very knew to this however, I'd like to know what is the correct or best way to buy IP's in, Company, trust, own name........

We currently have our OOP in ACT and one IP in Caboolture and wish to another IP within a few weeks and would like to know which is the best way to go about it.

I've heard that if buying under a trust structure then you cannot get tax advantages or something similar.

Also, I have an opportunity to build a spec home (aim to build and sell) and would like to know whether I should do it under my name or company. I already have a shell company which I run my small consultancy business in ?

Any help will be appreciated guys

 

[alexlee]

Buying property in a company name is generally not advised as you don't get the 50% CGT exemption if you sell after holding it for more than one year.

Also, in your case, buying it in the company you run your business in means the property can be taken if any liability arises from your business.

Using a discretionary trust means tax losses are quarantined in the trust and cannot be offset with personal income.
Alex

 

[Rixter]

There are a few different entities available to invest in.

Each one has its advantages & disadvantages depending upon what you are wanting it to achieve for you.

What the correct way is for you all depends on your individual objectives, investment strategy and personal risk profile.

No person is the same. We are all different. Whats right for me may not be right for you or anyone else.

I would suggest you contact a specialist professional in this area and run your specific details, circumstances & objectives past them to get a better understanding.

Hope this helps.

 

[ml320]

Thanks for some feedback - i really apreciated this. Still trying to learn how to get around in the forum. However, my aim is to build spec homes and sell for a profit

 

[Peter_Tersteeg]

If you're building and selling immediately then there might be some advantages to using a company from a tax perspecitve.

You only get the CGT exemption in your own name if you hold the asset for 12 months or more. If you sell in under a year, you get taxed at your normal tax rate, which could be up to 48% depending on how much you earn.

If it's in a company taxation structure, you'd only pay 30% tax on the profits.

If you're planning to hold properties for the long term, various trust structures might be better.

This is something you need to speak with your accountant about. There's a lot of variables to consider.