Summary of corporate and indirect real estate transactions
Produced in partnership with Stuart Borrie and Paul Beausang of K&L Gates LLP
Summary of corporate and indirect real estate transactions

The following Property guidance note Produced in partnership with Stuart Borrie and Paul Beausang of K&L Gates LLP provides comprehensive and up to date legal information covering:

  • Summary of corporate and indirect real estate transactions
  • Single purpose vehicles
  • Joint ventures
  • Key corporate vehicles used in real estate transactions
  • Key tax issues
  • Assembling a legal team

It is becoming more common for large real estate transactions to have corporate aspects to them. For example, the property being purchased may be held in a company, unit trust, partnership or another vehicle. The buyer may decide to acquire the relevant corporate vehicle (rather than the property) and then hold the property through it. Alternatively, several investors may wish to invest together to acquire and/or develop property, and set up a joint venture structure or investment fund, often with separate management agreements appointing specialists to manage the property.

Single purpose vehicles

A single purpose vehicle (SPV) is a company or other entity (such as a unit trust) set up solely for the purpose of owning a property. The company or other entity will contain nothing except for the property and the rent, leases and other contracts associated with that property.

By buying the shares in the company (or the units in a unit trust) rather than transferring the property, the buyer may make significant savings as it will pay any stamp duty on the price for the acquisition of shares (or units) rather than a higher amount of stamp duty land tax on the acquisition of property. The seller and buyer will have a commercial discussion about whether they share this tax saving.

There may be other tax advantages in holding