Owning Property Through a Company: Is It Right for You?

For some property owners and investors, holding real estate through a company can offer advantages that personal ownership may not. A company can provide a separate legal structure for holding property and may be particularly useful where the property is part of an investment portfolio, is intended to generate rental income, or is being acquired with other investors. However, incorporating a company simply because it sounds advantageous does not necessarily make it the right structure for every property owner.

Before acquiring property through a company, it is important to consider why the property is being purchased and what you intend to do with it. Issues such as financing, rental arrangements, succession planning, future sale of the property and the number of people who will have an interest in it can all influence whether corporate ownership is appropriate.

There are also ongoing obligations associated with owning property through a company. The company must be properly maintained and its corporate records and filings kept up to date. The costs of incorporation, accounting, compliance and professional services should be weighed against the anticipated benefits. The legal and financial consequences of transferring an existing property from personal ownership to a company should also be carefully considered before any steps are taken.

For families and investors with multiple properties or significant assets, the ownership structure can form part of a broader wealth and succession planning strategy. In some circumstances, the way shares in a company are held may offer greater flexibility for succession than transferring individual properties. However, corporate ownership does not automatically protect an asset from every risk and should be considered in the context of the owner’s overall circumstances.

There is no one-size-fits-all answer to whether property should be held personally or through a company. The appropriate structure should be considered before the purchase or transfer takes place, with the legal, financial and practical implications properly assessed. Regina Lex Attorneys can advise property owners and investors on the legal considerations involved in structuring property ownership.