What's the best ownership structure for your investment property?

When it comes to property investment, choosing the right ownership structure is crucial. The decision can significantly impact your tax obligations, financial flexibility, and long-term investment strategy. Before signing on the dotted line, it's wise to seek professional advice from a property investment strategist, accountant or solicitor to determine the most suitable structure for your needs.

Owning investment property in a single name

Advantages

• Full control over loan and property decisions.
• Flexibility to manage multiple accounts under one loan, each with its own offset.

Considerations

• Sole responsibility for loan repayments.
• Exclusive access to loan accounts and any linked offsets.
• Ownership structure may differ from the loan structure, so consulting with both a lender and tax adviser is recommended.

Investing with a Co-Owner

Sharing ownership with a trusted partner, friend, or family member can be an effective strategy.

Advantages

• Increased purchasing power, allowing for higher-value properties or multiple investments.
• Shared costs reduce the financial burden on each individual.
• Collaborative decision-making can lead to better outcomes.
• Flexibility with multiple loan accounts under one loan, each with its own offset.

Considerations

• Potential for disagreements or complications if the relationship breaks down.
• Reduced share of income and capital growth.
• Both parties have access to joint loan accounts and linked offsets.
• In case of changing circumstances, properties may need to be sold or ownership transferred.
• Tax implications, especially if a gearing strategy is involved, warrant advice from a tax adviser.
• Independent legal advice is recommended for all parties.