G’day, fellow Aussie investor! So, you’re ready to dip your toes into the property market, but you’re faced with the daunting decision of choosing the right ownership structure? No worries, mate! Let’s chuck another snag on the barbie and dive into the nitty-gritty of property ownership structures, Aussie style.
*Own Name (Joint/Individual):*
Ah, the classic Aussie way – owning property in your own name. It’s like throwing a shrimp on the barbie – simple, straightforward, and all about you, mate. Here’s the lowdown:
Pros:
– Enjoy a higher land tax threshold when flying solo.
– Easy-peasy lemon squeezy – Easy finance approval with no complex setup or ongoing admin hassle.
– You’re eligible for that sweet CGT discount when it’s time to cash in.
– Negative gearing tax benefits for properties under your own name.
Cons:
– Limited asset protection – your personal assets are on the line if things go pear-shaped.
– You will be maxed out of your borrowing capacity pretty quickly
– Difficult to pass on the baton.
*Discretionary Trust with Corporate Trustee:*
Now we’re getting fancy – diving into the world of trusts with a corporate trustee calling the shots. It’s like sipping champagne at a swanky gala – sophisticated, with a touch of class. Here’s what you need to know:
Pros:
– Serious tax savings through asset distribution.
– Enjoy CGT discounts aplenty – perfect for long-term investors looking to cash in.
– Asset protection – your personal stash is shielded from legal storms brewing on the horizon.
– Recycle borrowing capacity through strategic structuring and chance to build your dream portfolio.
Cons:
– Setting up shop ain’t cheap, mate – be prepared to fork out some serious cash up front.
– Ongoing admin hassle – trust me, you’ll need a spreadsheet just to keep track of it all.
– Finance approval won’t be that easy any more – lenders might be hesitant to lend to trusts, so it’s a fine line to walk.
– You will have to be brave enough to let go of any tax savings through negative gearing.
– Higher land tax threshold limits but could be avoided with strategic structuring.
*Company Ownership:*
Time to bring out the big guns – owning property through a company. It’s like strutting down the red carpet with all eyes on you, mate. Here’s what’s on offer:
Pros:
– Serious asset protection – your personal assets are locked away safe and sound, even if the property goes belly-up.
– Low tax bracket but with no CGT discount
Cons:
– Paperwork galore – get ready to drown in a sea of forms and documents.
– Setting up shop as a company ain’t for the faint-hearted – be prepared to jump through hoops and fork out a pretty penny.
– Limited flexibility – once you’re locked into a company structure, it can be tricky to change course.
So there you have it, Aussie investor – a detailed breakdown of property ownership structures. Whether you’re flying solo in your own name, navigating the trust maze, or strutting your stuff as a company owner, there’s no shortage of ways to make your mark in the property game. So grab a cold one, kick back, and get ready to make some serious property moves!