By CA Ruchika Bhagat
If you are a business owner, contractor, or independent professional who operates through a company, you may have contemplated purchasing property through your company. Property purchases using companies have become increasingly popular in recent years. For most higher-rate taxpayers, acquiring rental properties through a company makes sense. It offers complete tax savings on mortgage interest, as well as lower tax rates and more flexibility.
Key considerations before purchasing property through a company
A company is legally recognized as a separate legal entity from its owner, which means that the company’s assets are owned by the firm itself. When it comes to property investment, engaging a company might have a number of advantages; not only financial ones.
It’s true, the tax benefits of investing in property through a company are almost always better than owning property individually, but there are other compelling reasons to do so.
Conclusion
It’s always advantageous to adopt the company route for buying a property as it also opens doors when approaching lenders for loans as you build your property portfolio. Creditors are more likely to offer favourable loan terms if you demonstrate a strong portfolio of investment properties and a well-managed company.
(The author is MD, Neeraj Bhagat & Co.)
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