Choosing the right tax setup for a property development project
When starting a property development, you can choose from different business structures like sole proprietorship, partnership, joint venture, company, trust, or a combination of these. Sometimes, the type of structure you can use might be limited by who already owns the land. Also, different types of property development might need different structures. Here are some examples:
- A couple might split their big suburban property, keep a part for their own home, and develop the rest.
- Siblings who inherit land from their parents might decide to divide it equally, with some wanting to build a home and others wanting to sell their portion.
- A farmer might want to divide their land into smaller lots to sell them off for a profit.
- Friends might buy old properties to fix up and either sell or rent them.
- A professional developer might be involved in property projects as both the landowner and the builder.
Finding the best structure for your property development project involves balancing your personal needs and tax considerations. This includes thinking about protecting your assets, your financing needs, and the costs and complexity of managing the chosen structure. There is no single best structure for everyone. Tax professionals need to consider all these factors to find the best setup for their clients.]
Got questions? Reach out to Tax Ideas Accountants & Advisers at +61 2 83181545 or book an appointment on our live calendar.
