In whose name?
When you decide to purchase an investment property there are a couple of important things you need to do before heading off to the agent and signing the contract! It is important to have look at all your structure options with your accountant, including discussing whose name you want on the contract.
It can be critical to your investment structure that you have any new entities set-up prior to signing the contract as “and/or nominee” is not always enough and can get you in hot water depending on what entity you are planning the purchase the property in.
If you are purchasing as individuals, whether as joint tenants or tenants in common, you have a bit of flexibility and can generally change the contract to show different ownerships splits without too many issues. For example, if you are purchasing the property in a new family trust, this trust should be set-up before the contract is signed so that you can sign the contract “ABC Pty Ltd as trustee for the DEF Family Trust”.
When purchasing property in a Self Managed Superannuation Fund (SMSF) using a bare trust loan structure, you must have the bare trustee company set-up before you sign the contracts.
If you find yourself looking for your first or your tenth investment property, then please call the office on 03 8393 1000 and discuss the ins and outs of your financial situation. We can then determine the best structure for taxation purposes and capital protection. If you do require the set-up or a trust and company trustee, SMSF or bare trust loan structure, then we can arrange this for you.
Rebecca Mackie, Partner, Paris Financial
Image courtesy of Stuart Miles at FreeDigitalPhotos.net