It’s important to consult about ownership structures with McCarthy Accountants well before a property is purchased. It should be part of your planning process as it may be too late, or too costly, to make changes later.
Did you know that when purchasing a property you had options on the ownership structures of how to own that asset? Should it be in your personal name or via a company? Maybe a particular type of Trust is the way to go or you should possibly be consulting with a financial planner about a SMSF being used to purchase it. How are you supposed to know the options available, the benefits of those options, and what’s most suited to your financial circumstances?
Even the percentage ownership between a couple who are purchasing an investment property can make a big difference to your tax. For instance, if husband and wife are considering an investment property purchase in their personal names and wife earns a higher income (therefore is paying substantially more income tax) it might make sense for her to own a greater percentage of the asset. Other questions you need to ask about ownership structures are:
- Is the property expected to be negatively geared?
- Is it being financed?
- How long is the asset expected to be held as an investment?
- Is a future capital gains tax requirement a factor to consider?
- Are the current income levels of husband and wife expected to continue?
All of these components need to be factored into the decision and McCarthy Accountants are here to assist.
It’s important to consult about ownership structures with McCarthy Accountants well before a property is purchased. It should be part of your planning process. Along with confirming your lending capabilities, the impact of the property on your tax position, the expected holding cost of the property and how it fits within the household budget, contemplating the different ownership options makes sense at this time. It may be too late, or too costly, to make changes later.
The differing ownership structure options will impact your taxation in different ways and could greatly influence the decision you make. It can also influence the lending options available to you so we, of course, work closely with your finance broker. The same is true for your financial planner especially when a self managed superannuation fund is being considered as they will provide you with the financial advice required in this specialised area.