Hi Guys, I read in an earlier post that one of you questioned the rationale behind creating a property company?. My understanding that rental incomes are taxed at lower rates through a company, and if you are taking a long term view, the property is better off in a company. I understand that there will be a double hit of tax if you sell a property and try and take the money out of the company, but if u re-invest the sales proceeds in another property, you will not have this probloem. This is my understanding of the situation. Could you guys possibly help me out on this?

Essentially what you suggest is true, but nothing is quite that simple (I seem to be saying that alot on the forums these days). Take a look at the article and thread for Limited Company - Limited Liability? Also, forming a company has added costs and running one has considerable added costs, because there is greater 'accounting' and 'legal' obligations. There are certainly benefits though, as it is often easier to refinance and expand a portfolio faster than would otherwise be possible. One other matter worth mentioning is that a property company is more likely to fall foul of a larger volume of legislation than an individual, if renting the property out to tenants. It's a case of the law believing (not always accurately) that those in business will be more experienced and more knowledgable than individuals, and therefore should be held more responsible for any failings.