Buying property through a company name

Many investors decide to buy or refinance their property in the name of a Pty Ltd company for a variety of asset protection and taxation reasons.

Banks treat these loans differently than standard home loans so discover how to get approved.

Need help buying a property in Australia?
Talk to our experts and get a free assessment.

How much can I borrow?

Depending on your situation, you may be able to borrow up to:

  • 95% of the property value to buy a standard property as an investment property.
  • 80% of the property value if you’re applying for a company low doc home loan.
  • Case by case if you’re buying a commercial property.

Each lender has their own maximum loan amount and applicable lending guidelines.

If you’d like our help to apply for a loan in a company name, please fill in our free assessment form or call us on 1300 889 743 and one of our specialist mortgage brokers will contact you to discuss your options.


The hidden catches

Not every bank is set up to lend to company structures!

This may be because their system cannot process company loans or their credit staff aren’t trained on how to assess company loan applications.

Some banks:

  • Have unreasonable requests such as asking for tax returns for a shelf company that has just been set up!
  • Don’t offer professional package discounts to loans in a company name.
  • Offer professional packages that come with additional products such as an offset account or a credit card but won’t allow these to be in a company name.
  • Won’t approve a line of credit in the name of a company as they consider this to be a business loan.
  • Require all shareholders to be guarantors of the loan.

For this reason, it’s critical to apply with the right lender, one who can give you an excellent discount, has the experience to assess company loans properly and won’t have system issues with accounts being in the incorrect name or features that you can’t use.

To find out which lender offers the most competitive loan package, please contact us on 1300 889 743 or fill in our free assessment form today.


Company loan structure

When you borrow in the name of a company, the company will own the investment property, the company will be the borrower and all directors of the company will be required to guarantee the loan.

Shareholders and company secretaries aren’t usually required to be a guarantor.

For example, let’s say that John Smith is the director of ABC Pty Ltd.

Both he and his wife Joan Smith each own 50% of the shares in the company.

If they buy an investment property for the company, the loan would be setup as follows:

Borrower: ABC Pty Ltd.
Mortgagor: ABC Pty Ltd (ABC Pty Ltd is the owner of the investment property).
Guarantor: John Smith (Joan isn’t required to be a guarantor as she’s not a director).

Buying property through a company can be complicated!

Can a trustee company borrow money?

If you have a company as trustee for a trust then it can borrow In It’s Own Right (IIOR) and AsTrustee For (ATF) the trust.

Lenders refer to this structure as a trust loan with a corporate trustee.

The lender will ask for a copy of the company constitution and the trust deed to confirm that the legal structure is acceptable before approving the loan.

The amount you can borrow, the structure of the loan and the applicable lending guidelines will depend on the type of trust that you have.

Refer to our discretionary trust, unit trust & hybrid trust pages for more information.


How do the banks view company home loans?

What many property investors don’t know is that it’s often harder to get approved for a standard home loan when borrowing under a company name than if you were to borrow in your own name.

In fact, some banks refer these loans to their business banking division and charge higher interest rates

This is despite the fact that there’s very little difference between buying in a company name or an individual’s name.

Luckily, our mortgage brokers are experts in company home loans and can pair you with a lender that will approve your loan.

To get leading market interest rates, speak to us today on 1300 889 743 or complete our free assessment form.


Are the directors responsible for the loan?

It’s a common misconception that if a loan is in a Pty Ltd company name the directors aren’t liable for it.

If the company is unable to pay the loan, the bank can call on the director to pay the debt.

This is because before approving the loan, the bank will require the director to guarantee the loan.

How are directors liable?

All directors are “joint & severally liable” for the loan, which means that if there are two or more directors, the bank can still choose to claim the entire debt from either director.

In other words, if you’re buying a property with several business partners as a joint venture, the bank has the right to pursue any and all of you for the missed payments even if only one of you was unable to make their share of the repayments.

Are shareholders responsible for the loan?

Generally speaking, shareholders aren’t required to guarantee standard residential investment loans.

Although, in many Pty Ltd companies, the directors and shareholders are one in the same.

However, there are major shareholders who are not directors of the company applying for the mortgage.

In these cases, the bank will assess the loan on its merits and may require a guarantee from the shareholder as well.


What about business loans?

This page is for people buying or refinancing a property that is owned by a Pty Ltd company not for business owners looking for a loan for business purposes.

Please refer to our business loans page if you’d like to borrow money for your business.

Let us help you get a loan for your company!

Our mortgage brokers are experts in setting up home loans in the name of a company!

Whether it’s a simple company with one or two directors or a large joint venture with many partners, we can help you get approved.

We can quickly work out if you’re qualified for a loan and we know which lenders will give you the best possible interest rate.

Please contact us on 1300 889 743 or complete our free assessment form and one of our specialist mortgage brokers will give you a call to discuss your situation.

  • Beth

    If borrowing with a trustee company, what documents will the banks usually need us to provide?

  • Hey Beth,

    There are several documents that the bank will need from you in order to process a loan for a trust, particularly:
    – A certified copy of the stamped trust deed.
    – A certified copy of the company constitution.
    – Identification for all trustees, directors of trustees and beneficiaries of the trust.
    – Tax returns and notices of assessment for the trust (not always required, in particular for low doc or for new trusts).

  • WinterS

    Can I get a professional package discount even with a company home loan?

  • Hello WinterS,

    Many professional package discounts come with additional bank products such as bank accounts & credit cards, however, these don’t work in a company name in most cases. This is why it’s critical to apply with a lender that can give you an excellent discount and has the experience to assess company loans properly. You can discuss this with one of our brokers by calling 1300 889 743 or simply enquire online:
    https://www.homeloanexperts.com.au/free-quote/

  • Ida

    How difficult or easy can I expect it to be to get a home loan under the company name?

  • Hi Ida,

    It’s often harder to get approval for a standard home loan when borrowing under the company name, than it is if you were to borrow in your own name. In fact, some banks refer these loans to their business banking division and charge higher interest rates, even though there is very little difference between a loan to buy an investment property in a company, or in an individual’s name.

    Luckily, our mortgage brokers are experts in company home loans and can pair you with a lender that will approve your loan. To get leading market interest rates, speak to us today on 1300 889 743 or complete our free assessment form:
    https://www.homeloanexperts.com.au/free-quote/

  • Petrishpatricia Williams

    I want to buy a house through my company and the tax in 3 years in arrears(not paid)…will the process proceed or the the Tax Clearance Certificate necessary for the process. We two partners in the company as well.

  • Hi Patricia,
    It would really depend on the full circumstances to be sure but as a general rule:
    – For a shelf company that is not trading we don’t need any documents such as tax returns or notices of assessment. The banks look at your personal income instead.
    – For a trading company such as a business the banks will either need tax returns and notices of assessment OR you can get a low doc loan https://www.homeloanexperts.com.au/low-doc-loans/
    – If you have significant outstanding tax debts then most banks will not consider your application however a specialist lender might https://www.homeloanexperts.com.au/bad-credit-home-loans/ato-debt-home-loan/

  • SS

    Pro packs available with this?

  • Some banks don’t give professional package discounts to loans in a company name or won’t allow additional products such as an offset account or credit card to be in a company name. Applying with the right lender is key!

  • Singleron

    I’m planning to buy a property using my SMSF and will be setting up a SMSF in the middle of next year. I just want to how much I can borrow?

  • Hey Singleron,
    You can generally borrow up to 80% of the property value using a Self-managed Superannuation Fund (SMSF). However, please note that most lenders will limit your borrowing to 75% of the property value. We have an entire section on SMSF loans and the policies regarding them. Please have a look our SMSF loans section https://www.homeloanexperts.com.au/smsf-loans/ and feel free to comment or call us on 1300 889 743 if you want to discuss anything further.

  • Kaamey

    I have a discretionary trust and am looking to buy an investment property around $500,000. My wife and children are beneficiaries in it, and the trust holds approximately $150,000 in assets. Can you help arrange a mortgage over a property held in a discretionary trust?

  • Hi Kammey,
    Discretionary trust lending policies are not black and white and almost less than half of the lenders on our panel of almost 40 lenders accept home loans for such trusts. We have an entire page dedicated to discretionary trusts https://www.homeloanexperts.com.au/trust-loans/discretionary-trust-loans/ and you could contact us on 1300 889 743 to discuss more your situation.

  • Leicester

    I’ve started a cleaning company of my own 8 months ago in Melbourne, and I wanted some additional funds to buy a commercial property to help me expand my business. Should I go for a company loan or business loan?

  • Hi Leicester,
    The major difference between the two is that a company loan is basically for buying a residential property in the name of a Pty Ltd company (your company) for asset protection and tax benefits whilst a business loan is to expand your business or to buy a commercial property. In your case, it looks like you’ll need a retail commercial loan. It’s advisable that you look for a business loan in order to obtain extra funds required for your business operations.
    Please note that lenders will consider a number of factors such as how much money you’re putting into the business, your business experience, the type of business you’re running and the property you will using as security for the business loan. Learn more about business loans here https://www.homeloanexperts.com.au/business-loans/.

  • Anon

    Hi. My partner and son own a business. I am not part of the business in any way, they are currently in the process of lending money to purchase land and a block to build a new residence. The bank has stated that they require both my partner and I and our son and his partner refinance our own residential properties with them to put in to a trust. I am not sure about this. I am happy with our current bank and due to my current situation I would not be approved to refinance. I don’t want to be the reason they get declined for the business. Do I have to be involved due to our property being in joint names for the refinance in to the business trust or would it all go through the business and I be left out of it ?

  • Hi Anon,
    Sometimes business bankers require customers to bring all of their loans across to the new bank. Whereas in residential lending this is not required. So it would depend on the department that you’re working with (i.e. home loans OR business loans).
    It could be that your home is additional security for the loan for the land in which case you can increase your existing loan instead with your current bank OR you could refinance with the new bank.
    If you’d like a 2nd opinion then feel free to call us or if your partner knows more about the transaction then ask them to call us.

  • It’s worth getting a 2nd opinion as business banks often charge much more than is required. I’d recommend calling 1300889743 and asking for Romy. He’s quite experienced in this area.

  • Kostya

    Hi, thanks for a great article. How long does the company have to run before being able to get a loan for investment property? Does the unwritten rule of 2 tax returns apply here?

  • Hi Kostya
    If it’s a shelf company that you are buying a property in then it can be brand new as long as you have an income from another source e.g. a job. It’s very common for someone with a high paying job to set up a company or trust to buy real estate and in these instances there’s no need for historical tax returns.

  • Anney

    Good example here:
    Borrower: ABC Pty Ltd.
    Mortgagor: ABC Pty Ltd (ABC Pty Ltd is the owner of the investment property).
    Guarantor: John Smith (Joan isn’t required to be a guarantor as she’s not a director).

    In this case, if Joan put all personal assets (house) under her name and she’s the 50% share holder of this ABC Pty Ltd. she is NOT liable since she’s not the guarantor, right? this is mainly for asset protection.

  • Hi Anney
    I believe that Joan would not be liable if she is a shareholder and not a guarantor. However it is best to seek legal advice regarding asset protection. It’s a very complex area and just as an example family law courts can look through any trust / company structure used for asset protection or income minimisation.