Sydney Property Investors – Company Title vs Strata Title

While recently searching for an investment apartment for a property investor client I found a lovely older apartment in the harbourside suburb of Kurraba Point. It was priced lower than I anticipated, which I was ecstatic about until I discovered that the apartment was company title. This explained why the price was lower than anticipated as company title tends to be priced lower than strata title. As buyers’ agents, we are very familiar with the positives and negatives of company title versus strata title and who they are best suited for. However, I realised there may be owner occupiers and property investors who don’t know which ownership structure is best for their individual property needs.

In brief, there are two main forms of ownership structure for shared property such as apartments:

  • Company Title and
  • Strata Title


Strata Title:

This is the most common form of shared property ownership, i.e, apartments and townhouses. Under this structure, the lots (apartments, etc) are owned individually and there is shared common property. Strata title was introduced in Australia in 1961. Prior to strata title, buyers used company title to purchase shares in the building rather than owning their own individual lot outright. Most buildings have switched to strata title ownership, but there are still some older buildings, particularly in Potts Point and Elizabeth Bay in the East and Kurraba Point on the lower north shore that still use the company title structure.

Strata Title Benefits:

  • It adds value to a property as compared to a company title unit.
  • You can rent your property without restrictions from the building constitution (as in company title).
  • Easier to get finance from your lending institution.
  • Is widely accepted as the most transparent form of individual lot property ownership.
  • Owners get to vote on the bigger issues within their building through the strata committee.
  • Your property ownership and common areas are clearly delineated.


Strata Title Negatives:

  • You are required to pay levies.
  • As a shared owner you have liability if anything goes wrong in the building.


Company Title:

The company title structure is where you purchase shares in a building, which gives you exclusive use and ownership of the unit and shared use of the common property. This is the system universally used prior to 1961, and most buildings have now converted to strata title.


Company Title Benefits:

  • Good value for money as should be priced less than strata title units.
  • May be 100% owner occupied and no tenants if you’re an owner occupier.


Company Title Negatives:

  • You don’t own the title, rather a share in the company that owns the title.
  • The buildings constitution can prevent apartments from being rented out, if you are allowed to make changes to your property and even how much you can borrow to buy it.
  • The price growth isn’t as much as with strata title.
  • Tougher restrictions from lending institutions making finance harder to get and often requiring a larger deposit.


Our Buyers’ Agents Recommendation for Sydney Property Investors:

For property investors we believe Strata Title is the best form of property ownership because:

  • There is no restriction on renting out your apartment (excluding short term rentals such as AirBnB).
  • Banks will lend money on strata title but are more reluctant to lend on company title units
  • Units appreciate more in price under the strata title ownership structure

Company title can be very appealing if you are an owner-occupier. This is because this structures tends to represent good value and your money goes further with company title. Often it is the grand older style apartments buildings that are still structured as company title and there are a number of them in Potts Point, Elizabeth Bay and Kurraba Point.

If you’re an investor, you don’t need to be immediately scared away by company title, but you do need to thoroughly research the building to determine how onerous the building restrictions are. If they are onerous this most likely isn’t the right investment for you. In addition, the size of your deposit and your lending requirements may rule out a company title purchase.

If you’re an investor looking to enter the Sydney property market and you want to have every advantage,  give us a call or drop us a line as we’d love help.

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