The Best Way to Structure Your Property Investment: Individual vs Company vs Trust

The Best Way to Structure Your Property Investment: Individual vs Company vs Trust

When investing in property, one of the most important decisions you’ll make is how to structure ownership. Your choice of structure—whether individual, company, or trust—can impact your tax position, legal liability, and long-term strategy.

While there’s no one-size-fits-all solution, understanding the key features of each structure can help you make a more informed decision. Here’s what each ownership model means for investors, and how to choose the one that best supports your goals.

Individual Ownership

Buying property in your personal name is the most common and straightforward structure. It offers simplicity, tax benefits for certain investors, and minimal setup costs.

Key advantages of investing as an individual include:

• Simplicity and lower costs: No complex legal or tax structures required.

• Access to CGT discount: Individuals may be eligible for a 50% capital gains tax discount if the property is held for over 12 months.

• Negative gearing benefits: Investment losses can be offset against your personal income, reducing your tax liability.

• Lower land tax exposure: Individual owners may access land tax-free thresholds, depending on the state.

There are also downsides:

• No asset protection: If legal action is taken against you, both your investment property and other personal assets may be exposed.

• Taxed at personal rates: Rental profits are taxed at your marginal income tax rate, which could be high for some earners.

Best for: Investors seeking simplicity, tax benefits, and personal control—especially for their first or second property.

Company Ownership

Purchasing a property under a company structure separates ownership from your personal name. It can offer greater asset protection but comes with higher compliance and tax complexity.

Company ownership may appeal for the following reasons:

• Flat tax rate: Company profits are taxed at the corporate rate, which can be lower than high personal tax rates.

• Limited liability: The company, not the individual, is legally responsible for debts and liabilities.

• Long-term structuring: Useful for investors treating property as part of a business model.

However, there are key limitations:

• No CGT discount: Companies are not eligible for the 50% capital gains tax discount.

• Limited negative gearing: Property losses cannot offset your personal income—they stay within the company.

• Higher land tax: In many states, companies pay higher land tax rates and may not qualify for land tax-free thresholds.

• Compliance costs: Annual reporting and company administration are required.

Best for: Investors operating property as a business or seeking greater separation from personal risk, but not focused on capital gains.

Trust Ownership

Trust structures are commonly used for long-term tax planning, asset protection, and distributing income across beneficiaries.

Here’s why some investors choose to invest through a trust:

• Asset protection: Property is owned by the trust, not the individual, offering a layer of legal protection.

• Tax flexibility: Income can be distributed to beneficiaries in lower tax brackets, offering potential tax efficiency.

• Access to CGT discount: Trusts may be eligible for the 50% capital gains tax discount after 12 months.

But trusts require a higher level of setup and administration:

• Complex structure: Trust deeds, trustees, and annual reporting are required.

• Higher setup and running costs: Legal and accounting fees are typically higher than with individual ownership.

• Finance restrictions: Lenders may be more conservative when assessing trust-based applications.

• Land tax exposure: Trusts are often subject to higher land tax and reduced or no tax-free thresholds.

Best for: Investors focused on long-term wealth building, estate planning, and protecting assets across family structures.

Comparing Property Investment Structures

Factor	Individual	Company	Trust
Setup Simplicity	High – easy to manage	Moderate – requires registration	Low – requires legal setup
Tax Rate	Personal income tax	Flat company tax rate	Varies based on beneficiary incomes
CGT Discount	Yes (50% after 12 months)	No	Yes (50% after 12 months)
Negative Gearing	Yes – against personal income	Losses carried within company	Possible, varies by trust type
Asset Protection	Low	High	High
Land Tax Exposure	Lower thresholds in most states	Often higher, no threshold	Often higher, limited thresholds
Compliance Costs	Low	Moderate to high	High

Bringing it all together

There’s no universal ‘best’ structure—it comes down to your goals, risk profile, and financial position. Individual ownership is simple and tax-effective for many investors. Company ownership may appeal to those scaling a property business. Trusts offer more advanced tax planning and asset protection, but with higher setup and compliance.

Need help aligning your ownership structure with your investment strategy? Book your investment session with PropVest and let’s build the right foundation for your property journey.

Disclaimer: This article is for general information only and does not constitute financial, legal, or tax advice. You should seek advice from a qualified professional before making any property or investment decisions.