Question from John updated on 17th October 2019:
I am planning on purchasing an office property as an investment. Am I best off buying in my personal capacity or through a company?
Our expert Matthew Gilligan responded:
Although it is not possible for me to give you a definitive answer without knowing more of your circumstances, what I can say is that almost always you are better off buying the property through a company, than in your personal name.
In my view, the acquisition and retention of an investment property in a company offers much better outcomes than holding the property personally. For example, having the property held in a company means that any money you inject into the investment, either to aid the initial purchase or to fund it during its lifetime, is recorded as loans to the company. This is useful as it means you can protect the loan by assigning it to a trust, for example, or call it up in the future if you require funds for other purposes.
There is also more flexibility to alter ownership through transferring shares when a property is owned in a company.Matthew heads GRA's specialist property and asset planning division. He helps clients create optimal tax structures and build wealth through property. He has an extensive buy-to-hold property portfolio, is currently involved in over a dozen developments, and is author of two books - Property 101 and Tax Structures 101.