Top Strategies to Borrow for Investment Property in a Company

Most lenders will let you borrow in a company name for investment property, but the rules are tighter than they were a few years ago.

The deposit requirement sits at 20 per cent minimum for most banks when a company is the borrower. A handful of lenders will consider 10 per cent if you provide a director guarantee and personal income can service the loan, but those products are harder to find since APRA tightened lending standards. The loan amount and interest rate you access depend on whether the lender assesses serviceability using company income, director income, or rental income from the property itself.

Why Borrow in a Company Name

A company structure separates the property asset from your personal name, which limits liability if something goes wrong. If the company is sued or declares insolvency, your personal assets sit outside that ring.

Companies also create flexibility for multiple investors. Two or three directors can hold shares in the company, control the asset together, and manage tax outcomes through dividends rather than distributing rental income across individual tax returns. That structure suits Tweed Heads investors who want to build a portfolio with family or business partners without joint personal liability.

The tax treatment is different. A company pays a flat 25 per cent tax rate if it qualifies as a base rate entity, compared to marginal tax rates of up to 47 per cent for individuals. But from 1 July 2027, quarantined negative gearing rules apply to residential properties purchased after 12 May 2026 in company names. Net rental losses can only offset future residential rental income or capital gains, not other company income. Properties held before that date keep the old rules until sold.

What Lenders Look At for Company Borrowing

Lenders assess company loan applications differently to personal applications. Most require at least two years of company financials, a current balance sheet, and tax returns lodged through the ATO. If the company is newly registered or holds no operating income, the lender will assess serviceability against director income and require personal guarantees from all directors.

Consider an investor who registers a new company to buy a two-bedroom unit near Tweed Heads Hospital. The company has no trading history. The lender assesses the loan using the director's salary, applies the 3 percentage point serviceability buffer, and requires a 20 per cent deposit plus costs. The director signs a guarantee, which means the bank can pursue personal assets if the company defaults. The structure still limits liability in other scenarios, but not for the loan itself.

Rental income from the property can be included in serviceability, but most lenders apply a discount. They might accept 80 per cent of the estimated rent to allow for vacancy periods and management costs. If the unit rents for $600 per week, the lender uses $480 per week in the assessment. That reduction affects how much the company can borrow, particularly if director income is modest.

Deposit, LMI and Borrowing Capacity

The 20 per cent deposit rule applies to most lenders when the borrower is a company. LMI is rarely available for company borrowers at higher loan-to-value ratios, which means you need genuine savings or equity in another asset to reach that 20 per cent.

If your company already owns property, some lenders will let you use equity in that asset as security for the new purchase. The combined LVR across both properties must stay under 80 per cent in most cases. That approach works for investors building a portfolio through the same company structure.

Borrowing capacity depends on how the lender weights income. A company with strong rental income across multiple properties can borrow more than a newly registered company relying on a single director's salary. APRA's debt-to-income limit caps high DTI lending at 20 per cent of each lender's investor loan book, which tightens access if your company's income relative to the loan amount sits above 6 times.

Interest Rates and Loan Features

Investor interest rates for company borrowers sit 0.20 to 0.40 percentage points higher than owner-occupier rates, and company structures can push that margin up by another 0.10 to 0.20 percentage points depending on the lender. Variable rate loans give you flexibility to make extra repayments or refinance without break costs. Fixed rate loans lock in repayments for one to five years but carry penalties if you exit early.

Interest-only repayments are common for investment loans in company names. You pay only the interest component for a set period, usually five years, which reduces the monthly outgoing and can support cash flow if the company holds multiple properties. Once the interest-only period ends, the loan converts to principal and interest unless you refinance or request an extension.

Offset accounts linked to the loan can reduce the interest charged each month, but not every lender offers offset for company borrowers. If the company parks surplus cash in an offset account, that balance reduces the interest calculation without affecting deductibility. It is a useful feature if the company generates operating income or accumulates rent between expenses.

Capital Gains and Company Tax After 1 July 2027

Companies do not receive the 50 per cent CGT discount that individuals access. Instead, the full capital gain is taxed at the company rate. From 1 July 2027, gains accruing after that date will be indexed to CPI and taxed at a minimum 30 per cent rate under the new rules. Gains accruing before 1 July 2027 remain taxed under the existing rules, so the sale of a property purchased in May 2026 and sold in 2029 will split the gain into pre-July 2027 and post-July 2027 portions.

Eligible new build properties may elect the 50 per cent discount or indexation with the 30 per cent minimum. That choice matters if you buy a newly constructed townhouse in South Tweed and sell it a decade later. Run the numbers with your accountant before settling on a structure, particularly if capital growth rather than rental yield drives your strategy.

For Tweed Heads investors using a company to build long-term wealth, the CGT outcome is part of the picture but not the whole picture. Liability protection, income splitting, and portfolio control often outweigh the tax difference, particularly if the company plans to hold the assets for 15 or 20 years.

Refinancing and Portfolio Expansion

Once your company owns one investment property, refinancing can unlock equity for the next purchase. If the property increases in value and the loan balance drops, the lender may allow you to borrow against that equity without selling the asset. The LVR across the portfolio must stay within the lender's policy, typically 80 per cent for company borrowers.

Some lenders will assess a second or third property purchase without requiring updated company financials if the existing loans are performing and rental income covers serviceability. Others treat each application as new and request fresh documents every time. Knowing which lenders work with company structures and portfolio investors makes the process faster and less frustrating.

Switch Finance works with lenders who understand company borrowing and can structure the loan to suit your plans, whether that is a single property or a portfolio across Tweed Heads, Banora Point, and into northern New South Wales. Call one of our team or book an appointment at a time that works for you.

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