Should You Buy Property Through Your Business? Here’s What Every Owner Should Know
For many Australian business owners, property is more than just bricks and mortar.
It’s a strategy, and owning real estate through your company can open the door to tax savings, protect personal assets, and provide long-term investment flexibility.
But it’s not a silver bullet. Loan approvals are often harder, compliance costs higher, and some personal tax perks vanish once the property sits under a business structure.
So, how do you know if buying a property through a business is the right move for you?
Let’s break it down.
Key Takeaways
Buying property through a company separates personal and business assets, giving you liability protection.
Tax benefits can include deductions, lower rates on positively geared income, and access to small business CGT concessions.
Financing and compliance are more complex, with tougher loan approvals, higher costs, and extra reporting.
Personal tax breaks like the main residence exemption and individual CGT discounts are usually lost under a company structure.
What Does Buying Property Through a Business Actually Mean?
When your company name (rather than your personal name) appears on the property title, that’s buying property through a business.
It’s not unusual. Plenty of small-to-medium companies purchase offices, warehouses, or retail premises to secure stability and build long-term equity.
Others buy residential or commercial investments under a company structure as part of a broader tax and wealth strategy.
The difference is that ownership sits with the company. That changes how banks assess your borrowing power, how the Australian Tax Office (ATO) taxes your profits, and what legal protections you have.
Many business owners work with accountants and property lawyers early to decide which structure makes the most sense.
The Benefits of Buying Property Through a Business
Tax Deductions
Owning property through a business can unlock deductions not available when you buy personally. Loan interest, maintenance, and certain property-related costs may all reduce the company’s taxable income.
Structured well, this can make strategies like negative gearing more effective.
Capital Gains Concessions
Selling through a company doesn’t automatically trigger the 50% individual CGT discount. Instead, businesses may be able to access small business CGT concessions.
In some cases, this can halve the tax owed or eliminate it entirely for long-held assets tied to genuine business use.
A professional property law firm can explain which concessions apply to your circumstances and how to structure ownership for the best outcome.
Lower Tax Rates on Positive Gearing
If rental income exceeds loan repayments, that profit is taxed at company rates (25–30%) rather than top personal rates (up to 47%).
For positively geared investments, this can mean more money stays in your business.
Flexibility With Profit Distribution
Company ownership can sometimes allow profits to be distributed to shareholders, for example, a lower-income spouse. With the right structure, this reduces the overall household tax burden and creates room for smarter family wealth planning.
Limited Liability
Perhaps the biggest advantage: protection. If the business faces financial difficulties, your personal home and savings are generally shielded.
Creditors can only pursue company-owned assets, giving owners peace of mind when balancing business risk with personal security.
The Drawbacks Business Owners Should Know
Loan Challenges
Banks often treat company loans as higher risk. That usually means:
Larger deposits
Stricter approval processes
Higher interest rates and fees
More documentation
You may find yourself working with a business banker instead of a residential lender, which can slow things down and increase costs.
Loss of Personal Tax Breaks
Certain personal exemptions don’t apply when a company owns the property. These include:
Main residence exemption, which companies can’t claim.
50% CGT discount for individuals, which is generally unavailable unless business concessions apply.
This can make a big difference when it’s time to sell.
Higher Compliance Costs
Running a property through a company means more complex accounting. Annual reporting, ASIC requirements, and company tax returns all add up. The ongoing admin is heavier than if you owned the property personally.
Dividend Taxation
Even if your company pays a lower tax rate, taking profits out as dividends can create an extra personal tax bill. This “double layer” of tax is something to consider carefully with your accountant.
Other Key Considerations
Stamp Duty and Land Tax
Buying through a company doesn’t exempt you from state-based charges. Stamp duty still applies upfront, and land tax thresholds may differ for company-owned properties.
Getting early advice from an experienced property lawyer ensures you understand the upfront costs and avoid any surprises that could affect your investment returns.
Joint Ownership and Agreements
When property is purchased jointly with other directors or entities, written agreements are vital. They define how expenses are shared, how decisions are made, and what happens if one party wants to exit. Without them, disputes can get messy.
Companies vs. Trusts
Business owners often weigh up companies against trusts.
Companies: Clear structure, capped tax rate, strong liability protection.
Trusts: Greater flexibility in distributing income, but more complex to set up and manage.
Which works best depends on your goals, household situation, and long-term plans.
Financing Support
Mortgage brokers familiar with business lending can be invaluable. They know which banks are open to company borrowers, how to negotiate terms, and how to smooth the process.
Is Buying Property Through a Business Right for You?
There’s no one-size-fits-all answer. For some owners, a company structure offers the perfect balance of tax savings, asset protection, and wealth-building potential. For others, the loss of personal tax concessions outweighs the benefits.
The decision often comes down to how the property will be used:
For business use (like offices or warehouses), company ownership often makes sense.
For investment properties, it depends on the gearing, tax profile, and whether family flexibility is important.
For personal homes, it’s rarely the best fit, as you lose access to significant exemptions.
If you’re weighing up offices or warehouses, speaking with a commercial property lawyer can help you understand long-term obligations.
Turn Insights Into Action
Buying property through your business can be a smart strategy, but only if you understand the trade-offs.
The potential for tax savings, liability protection, and flexible profit distribution is real. But so are the risks of tougher lending, higher compliance costs, and reduced personal tax perks.
The smartest step is not just deciding on a structure, but making that decision with the right professional guidance. An experienced accountant and property lawyer can help you weigh the options, avoid costly mistakes, and structure ownership in a way that protects your business and personal future.
Ready to explore whether buying property through your business is the right move?
Talk to Legal Synthesis today. We’ll help you navigate the fine print and make sure your investment strategy is set up for success.
Book your free initial consultation.
FAQs
Can my company buy residential property in Australia?
Yes. A company can purchase residential property, but you won’t receive the same personal tax exemptions (like the main residence exemption). It may also be harder to secure finance compared with buying in your own name.
Is it better to buy property through a company or personally?
Buying through a company offers asset protection and capped tax rates, but you lose access to individual CGT discounts and main residence exemptions. For a family home, personal ownership is usually better. For commercial or investment properties, a company may be more effective.
How much tax does a company pay on property profits?
According to the ATO, most Australian companies pay 25-30% on net rental income. This is lower than the top individual tax bracket of 47%, which can make company ownership attractive for positively geared properties.
Do I still have to pay stamp duty if my business buys a property?
Yes. Company-owned purchases are subject to the same state stamp duty rules as individuals, and in some cases higher land tax thresholds may apply.
What are the risks of buying property through a business?
The main risks include harder loan approvals, higher interest rates, extra compliance costs, and loss of personal tax breaks. Dividend taxation can also reduce overall returns if profits are withdrawn from the company.
Do I need a lawyer to buy property through my company?
Yes. A property lawyer will review contracts, ensure the structure is set up correctly, and help you avoid losing tax concessions or exposing personal assets.