I have found a three story town house, already registered as three separate dwellings and owned by two companies (actually two company directors) that I would like to renovate into three flats, keep two for myself and sell the third.
I understand the process and taxes payable if I buy these as an individual but feel that if I did this as a developer there must be significant tax breaks. Am I right in assuming that if I set myself up as a company I can pay IVA on the purchase and, together with the IVA paid on the renovation costs, claim this back against the IVA paid by the purchaser of the flat I sell.
Does anyone know where I can get a full understanding of this subject.
Hello. Yes, there are tax breaks, BUT obviously its complicated:
-Company has to be signed up as immobilaria (no other industry).
-Buying the property is 2% tax instead of appr 10% (if buying personally). HOWEVER, the property needs to be sold within 5 years and cannot be rented out. If you rent it out, you get hit with the difference 10%-2%. Same thing if you keep it for longer than 5 years.
-All major renovation costs are tax deductible.
I hope this helps you. For me this tax thing was a maze, but I continue to educate myself.
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