How to Borrow in a Company Name for Property

Borrowing in a company name limits your lender choice and typically means higher rates, but it can make sense when you're protecting other assets or planning to bring in future investors.

Most property investors borrow in their personal name or through a trust, but a company structure offers limited liability and a clear division between your personal finances and your investment activity. Whether that trade-off is worth the extra cost depends on what you're protecting and how you plan to grow.

Why Borrow Through a Company

A company is a separate legal entity, which means creditors can't reach your personal assets if the company defaults on its borrowing. That protection matters when you're holding multiple properties or running a business alongside your portfolio. A company also allows you to bring in shareholders or transfer ownership without triggering stamp duty in most cases, which can be useful if you're building with a partner or planning an eventual exit to family members.

The downside is that fewer lenders will offer finance to a company, and those that do usually charge a higher interest rate than they would for the same borrower in a personal capacity. You'll also need to provide a personal guarantee in almost every case, which limits the liability protection when it comes to the debt itself.

How Lenders Assess Company Borrowing

Lenders treat a company application as a commercial or near-commercial transaction, even if you're buying a standard residential property. They assess the income and assets of the guarantors, usually the directors, rather than the company's balance sheet unless the company has significant trading history and independent income.

Serviceability is calculated on the guarantor's personal income, including salary, business distributions and rental income from other properties. The lender applies the same 3 percentage point buffer that applies to personal borrowing, and the debt-to-income cap introduced in February this year also applies to the guarantors individually.

Consider a director earning $120,000 a year who wants to borrow $600,000 through their company to buy a unit returning $550 per week. The lender will assess the director's capacity to service the loan based on their income and existing commitments, then add the rental income from the new property at a discounted rate, usually 80 per cent of the lease amount to allow for vacancy and costs. If the director already has a home loan of $400,000, the debt-to-income ratio will be calculated as $1,000,000 divided by $120,000, which is 8.3 times income and over the threshold that most lenders now restrict.

Interest Rates and Loan Features for Company Borrowing

Rates for company borrowing typically sit 0.3 to 0.6 percentage points above equivalent personal investor rates, depending on the lender and loan size. Some lenders will only offer variable rates, while others provide fixed terms up to five years. Interest only repayments are available, but lenders cap the interest-only period at five years in most cases and require a switch to principal and interest after that.

Offset accounts are rarely available on company loans, which removes one of the main tools investors use to manage cash flow and reduce interest costs. Redraw is sometimes offered but with more restrictive conditions than you'd see on a personal loan. If cash flow management is important, a line of credit or separate facility may be a better fit than a standard term loan, but these come with higher ongoing fees.

Tax Treatment and Negative Gearing Under the New Rules

Interest on a loan taken out by a company to buy residential property is still deductible against the company's income, but if the property was acquired on or after 7:30pm AEST on 12 May 2026 and it's not an eligible new build, rental losses are quarantined from 1 July 2027. That means the company can't offset a rental loss against other company income such as trading profits, only against future rental income or capital gains from residential property.

If your company holds the property as a passive investment and has no other residential rental income, a loss will sit on the company's books until you sell the property or acquire another rental that produces a gain. That changes the cash flow equation for leveraged property and makes interest-only loans less attractive unless the property is neutrally geared or you're confident rents will rise quickly.

Eligible new builds remain fully deductible, so if you're buying a newly constructed dwelling on previously vacant land or a development that increases dwelling numbers, the old rules continue to apply and losses can still offset the company's other income.

When a Trust Might Be a Better Fit

A discretionary trust offers similar asset protection to a company and more flexibility in distributing income to beneficiaries in lower tax brackets. Lenders typically assess trust applications in the same way as company loans, requiring personal guarantees from the trustee and often the beneficiaries, but the interest rate and product range are usually the same.

The main difference is how profits and losses are treated. A trust can distribute income to beneficiaries each year, which allows you to manage tax more actively than you can inside a company where profits are taxed at the flat company rate. If you're planning to hold the property long term and want the option to distribute rental income or capital gains to family members, a trust structure is worth comparing before you commit to a company.

You can find more detail on borrowing capacity and how different structures affect serviceability in our related article.

Setting Up the Structure Before You Apply

The company needs to be registered and hold an Australian Company Number before you can apply for finance. You'll need a registered office address, at least one director who is an Australian resident, and a company constitution or replaceable rules in place. If you're buying in a new company, some lenders will want to see evidence of why the company was formed and how it fits with your broader investment or business plans.

If the company is already trading, the lender may ask for financials including profit and loss statements and a balance sheet, even though they're assessing the loan primarily on your personal capacity. That's to confirm the company isn't insolvent and that the transaction makes sense within the company's objects.

Applying for the Loan and What to Expect

The application process takes longer than a personal loan because the lender needs to verify the company details, review the guarantees, and sometimes obtain internal credit approval from a different team. Most lenders require a full financial report for each guarantor, including tax returns, payslips, and statements for all accounts and liabilities.

If you're refinancing an existing investment loan from personal names into a company, you'll be treated as a new purchase for lending purposes, and stamp duty will apply in most states on the transfer of the property into the company name. That can add tens of thousands of dollars to the transaction, so it's usually only worthwhile if you're restructuring a large portfolio or bringing in new equity partners.

Lenders Mortgage Insurance is calculated in the same way as a personal loan if your deposit is below 20 per cent, based on the loan amount and the property value, but some lenders won't offer LMI on company loans at all, which means you'll need at least a 20 per cent deposit to proceed.

Ongoing Compliance and Reporting

Once the loan is in place, the company will need to lodge annual statements with ASIC, maintain director records, and keep the registered office details current. The lender may also require annual financial statements if the loan is above a certain threshold or if the company's circumstances change, such as a new director or a change in shareholding.

If you're claiming interest and other costs as deductions, the company will need to lodge a tax return each year, and the ATO expects to see proper separation between personal and company expenses. Mixing the two can lead to problems at audit time, so it's worth setting up a separate bank account and keeping all property-related costs clearly documented.

Call one of our team or book an appointment at a time that works for you to talk through whether a company structure suits your situation and which lenders will consider your application.

Frequently Asked Questions