Your company has cash. You have a property deposit to pay. Before connecting the two, establish who is buying the property and why the company would be paying.

Start with the transaction you are actually proposing. A purchase by the company is different from money leaving the company to fund a shareholder's purchase. Have your accountant and solicitor review the arrangement before signing or transferring funds.

1. Decide who will own the property

Write down the proposed buyer, the deposit amount and where the balance will come from. Ask your advisers to compare the ownership options against your borrowing, business commitments and eventual sale plans. Do not choose the owner simply because one account has cash available.

2. Establish the basis for the payment

Ask whether the amount should be a dividend, remuneration, repayment of a genuine debt owed by the company, or a loan. Those descriptions are not interchangeable. Confirm the supporting records, tax treatment and any related obligations before money moves.

3. Check Division 7A before relying on a loan

Private-company payments or loans to shareholders or their associates can be treated as unfranked dividends under Division 7A, subject to the rules and exclusions. Calling a transfer a loan does not, by itself, resolve the issue.

The ATO explains that a potentially affected payment or benefit may avoid a Division 7A dividend if repaid or converted to a complying loan by the company's lodgment day. That deadline is the earlier of the company's return due date and actual lodgment date. Your adviser should confirm the applicable requirements, written agreement, interest and repayments for your transaction.

4. Model what remains in the business

Prepare a cash-flow forecast that includes tax, payroll, suppliers, loan commitments and a buffer. Compare the property plan with the business's needs and the household's ability to meet any repayments. A deposit should not be assessed in isolation from the months that follow.

Questions to resolve before the transfer

  • Who is the legal purchaser?
  • What is the payment's legal and accounting basis?
  • Does Division 7A apply, and what must happen by when?
  • What cash remains available for the business?
  • What records and professional advice are needed?

Does using company cash make the deposit deductible?

The source of the cash does not establish a deduction. Ask your adviser to assess the particular expenditure and the purchaser's circumstances; do not assume a transfer labelled as a business expense is deductible.

Before you commit

Bring your company accounts, loan records and proposed purchase details to a review. Explore property structuring and tax strategy, or apply for a strategy session.

Official guidance

ATO: Managing Division 7A risks and corrective action · ATO: Division 7A calculator and decision tool

General information reviewed 16 October 2026. This is not personal tax, financial or legal advice. The treatment depends on the transaction and your circumstances.