If you’re considering buying property in Perth, it’s essential to pause and think about not just what and where you want to buy, but also how you want to own the property. At Essence Conveyancing, we’re dedicated to guiding you through the complexities of property purchasing entities to ensure you make the most informed decisions possible.
Exploring different purchasing entities:
Before you put pen to paper on any property contract, understanding the various structures under which you can purchase property is crucial. Each option has its own legal and financial implications that can significantly impact your responsibility and benefits as a property owner.
Key purchasing structures:
Individual ownership:
Purchasing a property as an individual means that you alone bear the legal and financial responsibilities. This straightforward ownership style means that any liabilities or benefits from the property are yours alone.
Joint ownership:
Joint ownership, or co-ownership, is an excellent way for multiple parties, such as friends or couples, to pool resources to buy property. This method can facilitate access to better financing options and distribute the financial burden among the owners. However, it’s important to clearly define the terms of ownership and responsibilities to avoid future disputes.
Corporate ownership:
Buying property through a company can shield individual owners from some liability and might offer tax advantages on rental income. However, the protective barrier of corporate ownership comes with its own set of regulatory and financial complexities that need careful management.
Trusts:
Setting up a trust to purchase property can provide significant tax benefits and protect assets. While trusts offer considerable advantages, they require meticulous initial setup and ongoing management. Trusts can be especially beneficial for holding family assets or for investment properties.
Self-Managed Super Funds (SMSF):
Using a SMSF to buy property is growing in popularity, thanks to potential tax benefits and the control it offers over retirement savings. However, the strict rules governing SMSF property investments mean this option is not suitable for everyone and requires careful consideration and compliance with superannuation laws.
Choosing the right entity for you
Each purchasing entity has its pros and cons, and the right choice depends on your personal circumstances, financial goals, and risk tolerance. Changing the ownership structure after purchase can be costly and complex, often involving double duty charges, especially with trusts or SMSFs.
Megan Reilly’s top tip:
“Before finalising any property purchase, consult with a financial advisor or accountant to determine which purchasing entity best suits your needs. While these are very limited, certain relationships may allow you to modify ownership without incurring duty charges. Therefore, it’s worth exploring all options thoroughly.”
Get in touch with Essence Conveyancing today
The decision on how to purchase your property in Perth is as significant as the decision to buy. Properly understanding the different purchasing entities can save you from future legal headaches and financial strain.
If you’re about to navigate the property market, don’t go it alone. Contact Megan at Essence Conveyancing for expert advice tailored to your unique situation. Our team is here to ensure that your property settlement process is seamless and beneficial for your financial future.
Disclaimer: Please note, the contents of this article do not constitute conveyancing advice, are not intended to be a substitute for conveyancing advice and should not be relied upon as such. You should seek conveyancing advice or other professional advice in relation to any particular matters you or your organisation may have. To find out more, please contact us.