Hi All,
A newbie question, I understand the benefits of purchasing a property as a company instead of as an individual,
my question is, with regards to the home loan, what are the consequences of taking a home loan as a company
instead of an individual where the company hasn't been trading before?Andy
Hi Andy
Making an application in a company name is not much different to applying in your personal name albeit some additional legal documentation is required.
Before you rush out and make an application in a Company name i would check as to whether this is the best way for you to go as their are a lot of negatives in purchasing in a Pty Ltd Company name on an asset you intend to hold long term.
Usually a Trust structure will provide you with more Asset protection and then maybe a Corporate Trustee is worth considering once you have a few properties uner your belt.
Structuring the loan correctly is more important so make sure your Mortgage Broker is au fait in dealing with investment loans and Trusts.
Richard Taylor | Australia's leading private lender
Companies do not get a 50% discount on capital gains tax after 12 months of ownership
from ATO web site
Generally, the discount method does not apply to companies, although it can apply in relation to a limited number of capital gains made by life insurance companies.
from
http://www.ato.gov.au/individuals/content.asp?doc=/content/36552.htm&pc=001/002/026/017/002&mnu=1051&mfp=001/002&st=&cy=1thankyou Richard for pointing me in the right direction, I will raise it with my morgage broker, as I do plan to make a long term investment and eventually pass it down to my children when the time comes. My initially reasons for company structure was I could easily transfer the property to anyone, by simply making them the owner of the company,
anyway, I will keep researching the pitfalls for both.
also thanks for your input duckster, I should have made mention that I plan to keep it.
kind regards
Andrew
Andrew
For the purposes of what you are tyring to achieve a Discetionary Family Trust maybe the way to go.
With a Pty Ltd Company the vehicle will be assessed to deem whether it is land rich and if so transferring the shares to someone else will incur stamp duty on the assessed valuation of the asset.
A DFT should be the way to go with the children as Trustees / Beneficiaries depending on their and you circumstances.
If you MB is Trust knowledgeable he should be able to advise accordingly.
Richard Taylor | Australia's leading private lender
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