Property Investment Strategies

Why Your Entity Structure Could Save or Cost You Thousands

Property Structuring Isn't Optional; It's Essential

How you own a property is just as important as what you buy. Entity structure affects everything from how much tax you pay each year, to whether you're hit with a substantial capital gains tax (CGT) bill down the line.

Yet too many investors buy in their personal name without understanding the consequences.

Let's break down what the wrong vs right structure looks like, especially when it comes time to sell.

CGT: A Tale of Two Investors

INVESTOR A

High-Income Earner	With a Trust Structure
Annual income: $500,000+	Property held in a discretionary trust
Sells an investment property held in their own name	Trust distributes the gain to lower-income beneficiaries
Capital gain: $400,000	Spouse and adult child (on marginal rates of 21% and 0%) receive income
CGT discount: 50%
Taxable gain: $200,000	Estimated tax payable: ~$30,000–$40,000
Tax payable: 47% of $200,000 = $94,000	Tax saved: $50,000+

INVESTOR B

Mid-Income Earner	Property Held in a Company
Annual income: $120,000	No CGT discount for companies
Capital gain on property: $300,000	Full $300,000 taxed at 30%
Taxable gain (after 50% discount): $150,000
Tax payable: ~$41,250	Tax payable: $90,000
	More than double what they'd pay in their own name

Structure Impacts Your After-Tax Wealth

Structure	CGT Discount?	Flexibility?	Best For
Individual	50%	Personal risk	Simplicity, low-volume investors
Discretionary Trust	50%	Income splitting, asset protection	High-income or family investors
Company	None	Legal shield	Developers/flippers (short-term holds)
SMSF (via LRBA)	33% in retirement	Tax-deferred	Long-term growth inside super

Holding property in your own name might be convenient, but it often comes at a significant tax cost. Whether you're earning $120,000 or $500,000+, the correct entity can dramatically change your financial outcome, especially at sale time.

If you have any questions or need your property structures reviewed, please get in touch.

WLW Group.

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Nijo Antony

Director