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.
Everything you need to know about property in Spain
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.