Hi!
New member here.
I am after some info on buying properties. Myself and another person both have our own investement properties – both in Aus and overseas.
We are looking at purchasing some properties jointly for 15 year plan minimum. The properties will be located both in Aus and overseas as well. We are considering buying the properties in a company name that is based offshore for tax reasons.
Does anybody have any experience in this?
Anyone give me any pros and cons to buying in joint names or creating a company to own the property?
Thanks!
Melissa
Don't think you're on the right road just because it’s a well-beaten path.
What others do I wouldn't have a clue. This would be my first step….. Make appointment with your accountant and discuss the options of which there are many, but there is only one that is right for you and your individual circumstances; or start with the ato website, lots of clues there.
When buying a property, my understanding is that money spent on improvements within the first 12 mths cannot be claimed, or have I got it wrong and then there is CGT. I would think it would be the first step, talk to the people who know this (oh to be an accountant), who hopefully guide their clients in what should be the direction that's right from the start for each individual.
Don't forget keep us up-to-date when you find the answer!
We all have to start somewhere, if anyone is prepared to share and devulge on this subject, don't be shy, why not share this info with the newbies…….that would be f-a-n-t-a-s-t-i-c. And a thank you in advance to those who do.
Cheers
I'd suggest to do it in your individual names, setup a common law partnership. Businesses generally go for the company structure to get the 30% flat tax rate. If you hold a property for longer than a year in your own names (rather than a company), you will have access to the 50% discount on the capital gain (not available for companies). This may result in a lot of tax savings in the long run, given that most property investments are negatively geared, the advantage of the 30% tax rate isn't that much anyway.
Over 15 years the property value growth will be a lot, and thus that 50% discount may come in very handy.
G'day
You are embarking on a venture that I suggest you need to do much more research into. Having an offshore company does not remove any tax obligation from you if you are the shareholder and director. There are ways around this using Bearer Bonds and specialist companies to operate your company. On this point I recommend you read books written by Lance Spicer (offfshore stuff) and/or N E Renton (trusts)
There is no advantage to buing in a company structure, but the real advantage is to use the comany as a trustee for a trust that buys and holds the property for you. If set up correctly you can access the 50% CGT benefits as individuals and with certain hybrid trusts you can also buy units in the trust that leads to your ability to claim negative gearing. On this point I recommend you contact Chan & Naylor (specialist property accountants – see their web site)
On a final point if you operate an overseas company and want to acquire property here then you must obtain Foreign INvestment Board approval. (see their website)
Hope this assists
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