i am looking to set up a small property management company in the near future. i am currently a temp resident of australia but am able to purchase a property to live in, in a company name. i'm assuming that if i started up a management company i could get the company to purchase a property for myself to live in and conduct my business from there. however i do not wish to put the asset with a trading company.
am i simply able to start another company/ corperate trustee and reside in that house and have the trading company pay the rent as thats where id be conducting my business
sorry hope it makes some sense, very new to companies.
regards
pete
There are a range of tax issues there. Companies pay a flat rate of 30% and no CGT discount etc etc. But there are also Fringe Benefits Tax issues if the company you are a director of provides accomodation etc.
You could reside in one property which you rent from a company you own and pay market rent and you are paid a wage by your trading company.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You may also need to be a licensed real estate agent to manage property that is owned by other parties.
Whatever you do, DO NOT buy properties in a company. As mentioned earlier, from a tax perspective there is no CGT discount for a company for selling assets. Further there is no protection for your property either.
Presumably you will be one of the shareholder of that company, which means that should you go bankrupt, your creditors can seize your shareholding – which means they effective get your property anyway.
Best arrangement for your situation would be to hold your property in a discretionary trust with a corporate trustee. The shareholding in the corporate trustee needs to be carefully thought out – best if your family is involved so that they own a fair portion of the shareholding of the corporate trustee. Make sure that you are not the sole APPOINTOR of the trust.
Your property management company can then pay rent to the discretionary trust which can then be distributed to you or across your family.
Have you thought of buying the property in super?
You must be logged in to reply to this topic. If you don't have an account, you can register here.
