Best Ownership Structures for Investment Property
Garreth Collard: 9 times out of 10 an LTC is the best structure for owning a rental property. Photo / Janna Dixon
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This is an excerpt from Diana Clement's regular series in the NZ Herald.*
Ownership of LTCs can be tweaked according to the income and tax rate of the couple or partners involved. Where the property is making a profit, for example, says accountant Garreth Collard, of EpsomTax.com, the majority shareholder of the LTC will be a spouse who is in the lowest tax bracket. This is ideal where that person is on the 17.5 percent tax bracket or lower."
It's a good idea to involve an accountant and lawyer in the setting up the LTC so you don't risk being accused of tax avoidance in the future. |
Nine times out of 10, argues Collard, an LTC is the best structure for owning a rental property: "You have the benefit of limited liability, a legal structure that is clearly a separate entity yet under your control, and yet it is treated at tax time like a partnership: the best of both worlds."
Read the complete article here.
Read the complete article here.
Would you like to know about LTCs vs partnerships vs Trusts?
- Read our article on the pros and cons of the four main types of structures here
- See also this article on LTCs vs QCs and LAQCs, or
- This article on the merits of trusts vs LTCs
* EpsomTax.com does not claim endorsement by either NZ Herald or Diana Clement. Please see statement below regarding trademarks and rights.