CORPORATE PROPERTY PLAY

Is it still smart to lodge a property in a corporation?

It depends.

This strategy can be powerful—but only if executed properly. Done wrong, it creates more tax and compliance problems than it solves.

👍 Pros

1. Avoids “estate gridlock”

When a property is held in a corporation, ownership is through shares—not the title.

So when a shareholder dies, what gets transferred are the shares.

This avoids a common PH problem:

+ Property passes to multiple heirs

+ Co-ownership balloons

+ One heir refuses to sell

+ Property becomes stuck indefinitely

A corporation sidesteps this. Decisions are based on voting rights—not unanimous consent. With the right structure, a majority can decide what happens to the asset.

2. You can unlock input VAT (if buying from a developer)

Buying from a VAT-registered developer usually means 12% VAT is embedded in the price.

For individuals, that VAT is a sunk cost.

But for a VAT-registered corporation, it becomes input VAT—which can offset future VAT liabilities. On higher-value properties, this can run into the millions. Don't throw this money away.

Important:

This only works if the company has (or plans to have) VATable activities.

If you set up a pure holding company with no VAT output, the input VAT just sits there—unused.

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👎 Cons

+ Possible VAT exposure on future sale

If structured incorrectly, selling the property may be subject to 12% VAT instead of 6% capital gains tax.

That’s a huge difference.

This usually happens when the corporation is considered to be in the real estate business—meaning the property is treated as inventory, not a capital asset.

A properly structured holding company, on the other hand, is generally subject to capital gains tax, not VAT.

The key isn’t what you call the company—it’s how it’s structured, classified, and operated.

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⚠️ Rules if you’re going down this route—continued in tomorrow's post.