Understanding the different structures for owning an investment property, with David Woods – Ep. 83
With the end of the financial year fast approaching, Mike is joined this week by Chartered Accountant and Accounting and Tax Specialist David Woods to discuss the varying options for structuring your property portfolio.
In this episode, Mike and David focus on structures outside of superannuation, starting with a discussion around short term and long term tax consequences. David explains how he seeks to understand his clients’ goals, so he can work with them to create a portfolio that focusses on their best interests.
Mike and David consider the difference between joint tenants and tenants in common, and when it’s worth weighting the ownership proportions of an investment in line with taxable income. David talks about the tax implications of a buy and hold strategy versus a long term hold, and how depreciation and capital gains tax can impact investment decisions.
Beyond the personal ownership model, Mike and David delve into the options of discretionary trusts and corporate vehicles for property investment. In clear language David explains the pros and cons of utilising a trust scenario for family and estate planning, and the CGT implications of owning property via a company, and when a corporate structure may work best.
Packed with valuable tips and timely advice, this conversation brings a lighter tone to the relatively dry topic of tax planning and investment structuring and forms essential listening for every property investor.
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Mike is joined this week by Chartered Accountant and Accounting and Tax Specialist David Woods to discuss the varying options for structuring your property portfolio. In this episode, Mike and David focus on structures outside of superannuation, starting with a discussion around short term and long term tax consequences.
What we cover in this episode
Join Tenants vs Tenants in Common
Short term vs long term tax benefits
The variations in land tax between states
Tax advantages or disadvantages of holding property in a trust rather than a personal name
Holding property in a company structure
The benefits of a good accountant and getting advice before you buy
The importance of a depreciation schedule
“What their goals are and where they’re looking to invest, are some of the things that might factor into those discussions – is it a short term hold, is it a long term hold, ’cause there’s obviously short term tax consequences as well as long term tax consequences” David 1:12
“The discussions that I often have with people are – what’s the strategy around this particular property, what are your goals with it, is it a buy and hold strategy?” David 5:20
“Each property is kind of a beast of its own in a sense, you’re sort of talking different strategies for different properties and then different goals with each property as well“ David 7:02
“As you get to property 2 or 3 to have some discussions around is there a better structure, is it a family trust or discretionary trust that might be better off to sort out that property, and that gives you a short-term distribution flexibility but also will give you some flexibility around distributions of capital gains” David 8:53
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The Geared for Growth property investing podcast was created by Mike out of a desire to provide value to his property investor clients. The idea is to source Australia's leading property investment experts and find how they and their clients are achieving exceptional results. The podcast is open to anybody interested in learning how to invest and the strategies you can apply to achieve exceptional results. You'll hear from buyers agents, mortgage brokers, strata managers, accountants and other professionals all sharing their insider knowledge.