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Sale and leaseback success
Utilising corporate real estate through a sale and leaseback transaction is a smart financing alternative for many companies. Taxand Australia demonstrates 7 steps to capitalise on sale and leaseback.
For vendors, the best outcome is to maximise the sale price they get while also setting favourable lease terms that ensure the ongoing competitiveness of their business conducted from the property.
- Know your property
- Environmental and building condition report
- Hold on to the development potential upside
- Be clear on the long term plan for the property
- Key lease terms
- Tax treatment
- Be open minded to non conventional sales
Ensure the terms of the sale and leaseback result in it being characterised for income tax purposes in the way intended by the parties. Where property is not your core business, think through the tax treatment of the property. For example, holding a property long enough to achieve a rezoning can sometimes characterise the property as trading stock for tax purposes.
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