How to Transfer Your Personal Property to a Business

If you're a business owner who also owns one or more personal properties, you may consider transferring your personal property to the business name. In other words, because companies are considered separate entities from the owners themselves, you may be planning to transfer ownership of a property from your personal name to the name of the company.

There are many reasons why people do this. First off, you may save on taxes, reduce the amount of personal debt that you have on an incomplete mortgage or increase the assets that your company has on its books.

Transferring property ownership in the right way will be critical to avoiding tax complications, ownership disputes and high costs. Here's how to get started.

1. Seek proper valuation

Having an accurate and fair market value of your property is critical before any transfer can take place. The valuation will ensure that any property being transferred into your company's books is of an accurate value and that the process is free of any legal violations.

There are many issues that may be caused by transferring a property to your business without proper valuation. For example, your company's books may have over-inflated assets, or you may pay yourself more than the property is worth. Such issues often result in tax audits and legal consequences.    

2. Arrange for an inspection

As part of the valuation, your property should also be inspected to determine its current state. Inspectors are available for both residential and commercial properties. They can check for structural issues, appliance damage, plumbing complications, HVAC problems and other issues. The inspection report allows you to determine the state of a property before it can be transferred into company ownership.

3. Consider taxes and deductions

Perhaps the most common reason why people transfer property is so they can get a lower tax rate. Corporate taxes on a property are often lower than income taxes. And if the property was earning you income or putting you in a higher tax bracket, you may be looking for ways of reducing this burden. Transferring the land, home or building to company ownership is an excellent strategy for lowering your tax bill.

4. Plan your finances

If you still have a mortgage on the property, you'll need to transfer the remaining balance to your company books. This involves working with the mortgage lender and getting all the paperwork prepared in advance. A conveyancer can help you transfer the mortgage to your corporate accounts while keeping all the necessary paperwork for future transactions.  

5. Gather all relevant documents

And speaking of documents, you'll need lots of those during such a property transfer. From the title to land registry records, hiring a conveyancer will simplify this process and reduce timelines between valuation and final closing.