Is it more advantageous to buy property as an entrepreneur, or is it better to buy as an individual? Can a company invest in private property? This article aims to answer these questions and more, providing you with the insights you need to make an informed decision.
Advantages of buying property through a business
The primary benefit of purchasing property through a business is the ability to deduct numerous expenses. However, these expenses are only deductible if you can prove that your business is actually generating income from the purchased property. If you can demonstrate this, the following costs are deductible:
– Purchase expenses
– VAT under certain conditions
– Various costs such as taxes, interest, maintenance fees, renovation works, and insurance
Disadvantages of buying property through a business
While buying through a business has its perks, it also comes with some drawbacks:
– The capital gains on a potential resale are taxed. As an individual, you are exempt from this if you don’t sell within 5 years of purchase.
– If you use the property for private purposes, it’s considered a benefit in kind. You will therefore pay taxes and social security contributions on this amount.
– There is no protection of your family home against creditors.
– The value of your shares will increase, which could make a future sale more challenging, especially if you have a very diverse property portfolio.
– You have to pay corporate tax on actual rental income. As an individual, this is often more advantageous.
It’s an individual choice
Whether you buy as an individual or through your business depends on your situation. Sometimes one is more advantageous than the other. As a business manager, it’s advisable to consult an accountant before making any real estate investment. Also, consider your short-term and long-term future plans.
Factors to consider
Financial Planning
Consulting a financial advisor is crucial for both individuals and businesses. They can provide a comprehensive analysis of your financial situation and help you understand the tax implications of your investment.
Investment Goals
Are you buying the property for rental income, or is it a long-term investment? Your investment objectives will significantly influence whether buying as an individual or a business is more advantageous.
Legal Implications
Understanding the legal landscape is essential. Different rules and regulations apply to individuals and businesses, and these can have long-term implications on your investment.
Consult the experts
Before making any investment, it’s crucial to consult with professionals. Accountants can provide insights into the financial aspects, while legal advisors can guide you through the legal maze. Real estate agents can also offer valuable market insights that can help you make an informed decision.
Conclusion
The decision to buy property as an individual or through a business in Belgium is complex and depends on various factors, including your financial situation, investment goals, and future plans. Each option has its pros and cons, and the best choice varies from one investor to another. Therefore, it’s crucial to consult with financial and legal experts to ensure that you’re making the most advantageous decision for your specific circumstances.
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