[Podcast] Building Wealth: Ken Raiss Unveils Optimal Structures for Property Development and Business Growth

In today’s show, Ken Raiss and I are talking about ownership structures.

How you set things up can have lasting impacts on not only your asset protection but also your tax liabilities and your flexibility to grow in the future.

And in particular the various ownership structures available for those interested in property development and in particular successful business ownership structures,

Today’s topic might not be the most glamorous but is unequivocally crucial for anyone invested in property investment or running a business.

Get ready to harness the power of well-thought-out structures, learn how they can shield your assets, reduce tax liabilities, and pave the way for prolific growth.

Business structures for property development:

• A well-devised business structure is integral for successful property development.
• The importance of understanding different business structures and their implications on investment outcomes.
  • Property investment should be run as a business, but property has a different layer of complexity compared to other businesses.
  • You need a level of flexibility to deal with changing circumstances and intentions.
• The complexities of investment ownership in property development can be better navigated with an effective business structure.
• A comprehensive guide to understanding the labyrinth of business structures specifically tailored for property development.
  • Traditionally, people use a company,
    • However, they own the shares so it doesn't give them the flexibility if they decide to keep the property because they’ll lose the 50% capital gains tax discount.
  • A unit trust is a more flexible structure with the same rigidity at the top.
    • However, if you decide to keep it and that property is negatively geared, then you can't claim the negative gearing against your PAYG tax instalments.
  • Partnerships have joint and several responsibilities.
    • This means you could end up stuck with your partner’s problems.
  • If you couple a joint venture with a co-development agreement, that allows you to split those titles without the triggering of tax, GST, and stamp duty in most states.
  • A small group of people benefit from using a self-managed super-fund.
• Exploring different business structures and trusts can lead to successful property development.
  • It's critical to consider the finance, tax implications, and long-term implications of your structure.
  • You should always seek professional advice to find the right structure for your specific circumstances.

Business structures

• Choosing the right business structure can lead to successful investments.
• Navigating the complexities of business structures is a vital skill for investors.
• When considering structures, people should be thinking about:
  • Asset protection
  • Cash management
  • Exist strategies
  • Taxation
• Valuable insights on business structures for investors to consider:
• Sole traders are individuals working under their own names.
  • It’s quick and simple, but includes no asset protection and leaves you exposed.
• A company is a legal entity which is separate from its owners.
  • Companies provide a form of asset protection, but limited liability.
• A trust is an entity that holds the assets and generates the income, overseen by a trustee, normally a company
  • A trust does not pay tax.
  • There are different types of trusts available, depending on the person’s specific circumstances.

Links and Resources:

Ken Raiss, director of Metropole Wealth Advisory

Have a chat with Ken Raiss to ensure you have the correct asset protection strategies in place – click here

Why not get the team at Metropole on your side to give you holistic property and wealth advice– find out more here

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Some of our favorite quotes from the show:

“In other words, if you go into joint and several loan with your business partner or family member, which sometimes is the case if they can't keep up the loan, you're responsible.” – Michael Yardney

“You know, I went through an audit last year and came out squeaky clean. But you've got to do it correctly because you never know when they're going to knock on your door and say hey, can I have a look at your records.” – Michael Yardney

“Now, I know there are a lot of challenges going on in the world and probably in your life personally, but you have the opportunity, as O'Brien said, to decide your destiny.” – Michael Yardney

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