BEAN THINKING: Structuring for Property Acquisitions - What's the Goal?
When buying property, you often have to act quickly to enter into a contract. This means you have to be ready with all the details, including who is going to buy the property.
Unfortunately, identifying “who” can be the hardest step.
Even at this early stage, it is important to choose the correct entity at first attempt. Changing the purchasing entity at a later date may incur double stamp duty charges.
Stamp duty is an obligation of the purchaser and is a real cost to factor into the acquisition cost. The real question to ask is - “What do I intend to do with the property after it’s acquired?”
There are several possible answers:
1. Buy and reside in
2. Buy, hold, rent
3. Buy, renovate, sell
4. Buy, subdivide, sell
5. Buy, subdivide, build, sell
6. Buy, subdivide, build, hold
Your usage of the property is a key factor to determine the best entity to acquire the property. It assists addressing the following aspects:
- Asset protection
- Risk (if developing)
- Tax impact
By getting into the habit of knowing what the goal is, the easier it becomes to choose the right entity to own the property.
If you would like more information, please contact Bill Charlton or Lauren Steinheuer on 07 3210 5500. We are more than happy to discuss these matters with you in more detail.