What is the best structure to buy your asset in?
Getting the correct structure is just as important as buying the right property and there is no right answer for everyone. There are legal, financial and relationship implications.
It depends on what type of property you are purchasing:
- Your own home or principal place of residence
- First investment property
- Adding another property to your portfolio
- Buying a property in your Self-Managed Super Fund (SMSF)
- When you are purchasing your own home, it should be whoever poses the lowest level of risk.
The right structure for buying an investment property depends on what type of property it is and the purpose of the property. It is also about tax flexibility, asset protection and estate planning benefits.
Properties bought in an SMSF are typically geared for those who have substantial funding. An SMSF is also a common type of property-owning trust in its own right.
Why buy property in a trust?
Trusts are used for investment and business purposes. The ATO defines a trust as a relationship, not a legal entity, to put it simply, trusts separate legal ownership from “beneficial ownership”. The beneficial owner or owners have the rights to receive the benefit of trust property.
In this video, Danny Buxton, Director of Triple Zero Property interviews Solicitor Tom Wood from FC Lawyers as to why different entities are essential when building a property portfolio.
Buying property is a huge financial decision and it is essential to get each step right. Your tax, business or legal adviser will advise you on the correct structure required for your situation.
If you want help gathering your expert property team we can help: call 1300 897 000 or email [email protected].
Disclaimer: The content of this document is not to be considered specific advice. Your situation is specific and individual; as such, you should always consult a registered and qualified professional within a particular area of advice needed.