What Entity should you buy property under?
Once you are over the hurdle of finding a suitable property, often there is a confusion on whether you should buy it under your personal name or another entity. We hear friends and families talk about buying under a Trust or a Company name which often leads to a question, what is most suitable to your circumstances? Listed below are the key options that you need to explore
Personal Name
The default option used by even the most seasoned investors, just because its relatively simple. You can buy it under your name or in conjunction with a partner or a friend. It is relatively easier to get such deals financed too and you can get higher tax benefits by negatively gearing, which is excellent when you are sitting on a higher tax bracket. The benefit however reverses to a loss, if you have a positively geared property as it would increase your taxable income and you end up paying more tax.
Company Name
You can purchase a property in a company name, which is often a consideration when the businesses are trying to own their corporate premises. It is not a great choice when you are looking for an owner-occupied property or a residential investment property as there are limitations on the amount of Capital Gains Tax exemptions and funding can also be a little more challenging. The biggest risk however is that if you purchase the asset in the same name as your trading entity, you risk losing the property in case the company gets under any sort of legal battle
Trust
This option is becoming increasing popular as more and more Financial Planners, Accountants and Property Strategists are raising awareness on the key benefits such as tax benefits, asset protection, estate planning and so on. There are different types of trusts, and you need to speak to a specialist to ensure you set the structure that is most suitable in your circumstances. Keep in mind that it's not all rosy in this option as it does come with additional ongoing costs and not ever lender prefers to lend to a trust. Also, if negative gearing is core part of your strategy, it is not the same in a trust
Self Managed Super Fund
An SMSF may invest in property only where the acquisition fits its investment strategy and superannuation obligations. It is not a default borrowing workaround after personal lending capacity is exhausted. For property limited recourse borrowing arrangements (LRBAs) entered into on or after 10 August 2026, the property must meet the business real property test. Ordinary residential investment letting does not automatically qualify. Earlier LRBAs may be maintained or refinanced for the same asset, and a binding acquisition contract exchanged before that date may qualify for transitional treatment. Other superannuation and lender requirements still apply. Read the current SMSF residential rules and obtain advice from your SMSF, tax and legal advisers. An SMSF may still acquire ordinary residential investment property without LRBA borrowing, subject to the usual rules. Fund assets are separate from members’ personal assets; ordinary residential investments must not be used for members’ personal accommodation. Tax outcomes depend on the fund, investment and member circumstances. Obtain independent financial, tax and legal advice before choosing an ownership structure.
Above is only a high-level summary of the key points, our Financial Planner is there to help you make the best decision, so please feel free to reach out if need professional guidance.
