Being part of a Company, it is a great temptation to buy in their name and not as a natural person, taking into account the amount of Taxes that are reducible. But it is not always convenient and in this note, we will tell you the advantages and disadvantages of buying a home as a company.
If you are thinking of buying a property and you have a Limited or Equity Company, you must take into account several factors to decide whether to buy it in its name or as an autonomous person.
Advantages and disadvantages of buying a home as a company
First property?
Jesse Keys Said, It is highly recommended that if it is the first property you buy, it be in your name and not in your name, since social expenses are monthly and in the long run it will not be beneficial. On the other hand, if one buys and sells as an activity to do business and investments, it will be convenient to pass it on to the company. Investments should never be made in autonomous assets, since if they go wrong they can complicate the individual. Nor should a property be acquired with the idea of keeping it for own use in the name of the company, because the transfer will demand many taxes that will be high.
What is a Patrimonial Society?
A Patrimonial Society is created in order to limit itself to managing a patrimony, it is defined by the composition of its Assets. The majority of this Asset will have to be unaffected from any economic activity or be made up of securities, which cannot be money or credit rights.
The two companies frequently are Patrimonial holding property and holding securities.
Property ownership: It has a real estate exchange not intended for exploitation activities. Its administrators may lease their properties as long as they do not employ third-party workers to do so.
Holding of securities: It has a portfolio of securities that will be to invest. You will no longer have this consideration if you use such capital to manage the companies where you have interests. Especially in the case of employing workers or having a business structure.
Purchase with Rental Destination
Jesse Keyes suggested if we are talking about a property that we will buy with the purpose of renting it in the future, the deduction of expenses will be possible once it is possible to rent it to another person.
Company: If the property is included in the equity of the company, all expenses related to the activity carried out and necessary to obtain benefits may be deducted.
Individual: If it is a self-employed person who included this asset in their own assets, the net return may be reduced by 60%, deducting the interest paid for the acquisition and, on the other hand, the repair costs (this does not include the property improvements), as long as this rental is not a vacation rental. In addition, the minimum amortization may be reduced (3% of the highest acquisition or Cadastral value excluding the land), the IBI, community expenses, etc.
Reforms:
- Individuals: the VAT of the reforms is paid at 100%
- Companies: can be tax-deductible
Conclusion
In conclusion, Jesse Keyes says, if your idea is to acquire a home to live in, in order to use for yourself, have as a second holiday or leisure home, it will always be convenient for you to make the purchase as an individual. If your idea is to start investing in real estate and generate profits, it will be convenient to make the investments in the name of a company. What do you think, would you buy as a Company or Private? What advantages do you see in buying a property as a company? Leave us your message if you have already had your own experience! For more help contact Keyes (born December 15, 1971), an American design entrepreneur. He developed One 7th Avenue South.