Choosing the Best Structure for Your Investment Property
- Symmetry Accounting & Tax Pty Ltd
- Sep 12
- 2 min read
Deciding how to hold an investment property is a major financial step. The structure you choose can affect your tax obligations, investment returns, and long-term wealth-building goals. At Symmetry Accounting and Tax, we regularly guide clients through these decisions, helping them create strategies that are both tax-efficient and sustainable.
Understanding Negative and Positive Gearing
When a property is negatively geared—meaning the costs outweigh the rental income—the tax loss can often be offset against other income. In this case, many investors hold the property in the name of the highest income earner to maximise the benefit of these deductions.
By contrast, a positively geared property—where rental income exceeds expenses—is generally better suited to the lowest income earner. That way, the rental profit is taxed at a lower rate.
The challenge is that many properties begin negatively geared but eventually shift into positive territory. A common strategy is to offset the gains from positively geared properties by purchasing additional negatively geared ones. Over time, this creates a balanced property portfolio that can generate steady income.
How Family Trusts Add Flexibility
For investors wanting more control over how income is distributed, holding property in a discretionary (family) trust may be worthwhile. Trusts allow income to be directed to different beneficiaries depending on who is in the lower tax bracket at the time. This can provide significant flexibility as personal circumstances change.
That said, trusts come with some considerations:
Financing: Some lenders may be more cautious when approving loans to trusts.
Losses: If the property is negatively geared, losses cannot generally be claimed against personal income. Instead, they stay within the trust to offset future profits.
Land tax: In certain states, trusts may attract higher land tax rates, which can impact returns.
At Symmetry Accounting and Tax, we help clients weigh up these pros and cons, ensuring the chosen structure supports both current and future goals.
Planning with the Long View
Property is best approached as a long-term investment. Over the years, your income or career path may change—whether through promotions, career breaks, or family commitments. These shifts can significantly influence which ownership structure is most tax-effective at any given time.
A sound strategy may involve:
Using individual ownership in the early years, especially for negatively geared properties.
Transitioning into a trust structure as your portfolio grows and generates higher taxable income.
Regularly reviewing the tax and lending landscape to stay ahead of changes that affect your investments.
Why Professional Advice Matters
There is no universal answer to the question of how best to hold an investment property. The right decision depends on your income level, investment goals, and personal circumstances. That’s where tailored advice becomes essential.
At Symmetry Accounting and Tax, we help investors navigate these complexities with clear, practical strategies. Our goal is to ensure your investment structure maximises tax efficiency, supports long-term growth, and aligns with your personal financial objectives.
If you’re considering purchasing or restructuring an investment property, speak with our team today for expert guidance.
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