Hi
I am currently seeking advice on how to structure my business entity for property development and purchasing property investments into the future. At present I am looking at purchasing a block of land with the view of building a house to on-sell. The longer term plan is to continue down this path until I have built a substantial cash base to then buy longer term investment properties.
Your thoughts would be greatly appreciated.
Cheers
HKR Projects
Hi HKR
I would normally recommend a multi-layered trust structure to get you setup initially. And then you utilise a separate trust structure for developing to that you would use for investing.
For Asset protection, the multi-layered helps protect your money. So you set up a trust that does nothing except for hold the equity you gift to it and then it provides loans to other structures via registered second mortgage. Proper advice is essential so that varies entities are not regarded as merely your alter ego. An accountant is not legally able to provide you with asset protection advice, so see a lawyer for that. Accountants can advice on the taxation considerations as well as tax lawyers It is a great idea to find both a great lawyer and a great accountant with property experience.
regards
Darryl
RPI | Certus Legal Group / PRO Town Planners
http://www.certuslegal.com.au
Email Me | Phone MeProperty Lawyer & Town Planner
PS
forgot to mention that you need to use a different trust structure for developing than investing. If you utilise the same it is likely that you will be classed as a developing business and that you will not be eligible for the 50% CGT discount for investments held longer than 12 months.
Use of unit trusts v discretionary trusts will depend on your situation as well as the state land is held in. Sometimes a company can make sense as the developing entity, again depends on your personal situation.
regards
Darryl
RPI | Certus Legal Group / PRO Town Planners
http://www.certuslegal.com.au
Email Me | Phone MeProperty Lawyer & Town Planner
Many thanks Darryl.
The advice on finding a good lawyer is a good point.
Cheers
Where are you based HKR ?
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
ACT
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