Ep 350: Reduce CGT by 28%! How to own property in a company.

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Apr 1, 2025

Explore a unique strategy for property investment that could slash your capital gains tax by up to 28%! Discover how using a private company for ownership can provide massive long-term tax savings. Learn about the importance of careful structuring, borrowing personally for shares, and distributing capital gains effectively. Hear real-life examples demonstrating significant tax reduction, especially for PAYG and self-employed investors. Plus, uncover potential pitfalls like borrowing limitations and land tax surcharges to navigate your investment journey.

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INSIGHT

Company Structure Reduces CGT

Using a company to hold investment property can potentially reduce capital gains tax by over 30%.
It allows enjoying negative gearing benefits while overcoming typical accounting concerns.

ADVICE

Borrow Personally for Interest Deductions

Borrow personally to buy shares in your property investment company to enjoy interest deductions outside the company.
The company then holds the property debt-free to generate profits and pay dividends.

INSIGHT

Spread Dividends to Lower Effective CGT

Although companies pay 30% tax upfront on capital gains without discount, spreading dividends over many years recoups franking credits.
This gradually reduces the effective capital gains tax rate significantly below personal rates.

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In this episode, Stuart unpacks a lesser-known strategy in property investing: using a private company to hold investment properties and how it could cut your capital gains tax (CGT) by up to 28%.

While companies don’t get the 50% CGT discount or immediate negative gearing benefits, Stuart explains how careful structuring, like borrowing personally to buy company shares, can preserve gearing benefits and open the door to massive long-term tax savings.

Using real-life scenarios, he shows how distributing capital gains slowly over many years, using franking credits, can drop your effective CGT rate to as low as 10%, less than half what you’d pay in your personal name.

He also breaks down:
✅ When this structure works best (e.g. for PAYG and self-employed investors)
✅ How to avoid land tax surcharges
✅ What to watch out for, like borrowing limitations and upfront costs

This episode is essential listening if you’re looking to build long-term wealth through property and want to know whether a company structure belongs in your portfolio mix.

Tune in to hear when and why this strategy works and when it doesn’t.

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IMPORTANT: This podcast provides general information about finance, taxes, and credit. This means that the content does not consider your specific objectives, financial situation, or needs. It is crucial for you to assess whether the information is suitable for your circumstances before taking any actions based on it. If you find yourself uncertain about the relevance or your specific needs, it is advisable to seek advice from a licensed and trustworthy professional.