Purchasing property, half in company and half in personal name

Discussion in 'Accounting & Tax' started by gach2, 5th Sep, 2018.

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  1. gach2

    gach2 Well-Known Member

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    So originally my intention for my next project was to purchase in a company.
    Project involves buying land - building duplex - subdividing and selling individually and paying TAX as if i was running this as a business.

    At the time of planning this I had my PPOR. Since then (not to unfortunate circumstance I am planning to get rid of my PPOR and have no plans of a future PPOR (emotionally based) for the next couple of years.

    So thought I would make one of the above duplex unit my PPOR.

    So my idea is still to sell the other unit immediately and live in the other one for some time till I am able to purchase my dream PPOR.

    Just wondering opinions on buying 50/50 company/personal name with each entity entitled to one unit and the company (owning as if its in business) and the individual for the purposes of PPOR.

    The only negative consequences I could think of is if purchased under the margin scheme I would need to pay the margin GST on the individual purchase. Bur based on my knowledge when the PPOR is sold i should be exempt for CGT assuming I meet all the requirements

    I will be doing further research but if anyone could share their opinion it would be appreciated.
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    why?
     
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  3. gach2

    gach2 Well-Known Member

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    why in company for the start?
    Originally wanted to keep the enterprise of this and my personal name separate
    Ability to retain profits in the company when my personal income from other sources is higher.

    Also didnt want mix up this business with some other business of mine in my personal name
     
  4. gach2

    gach2 Well-Known Member

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    its a vague answer but my heads spinning from something unrelated lol
     
  5. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Why do you think ownership in your name makes the issue less subject to full income tax on the profit and GST? I believe the entity conducting the build would be a partnership and its not like you can have two building contracts for a duplex. And that entity required to be registered for GST and the issue of attempting to reside in part is likely a concern. The home would likely not be a CGT asset and hence no main residence exemption... TD 92/135 provides useful reading. Or our developer toolkit which examines all the tax issues in detail (subject to a forthcoming rewrite to include more recent ATO views.

    Also if there is a profit for the company consider what occurs if the company pays tax. Then you take the profit - Full and final tax may be a high marginal tax rate.

    Personal tax advice would address all the concerns
     

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