- April 13, 2017 at 1:30 pm #198862
According to several sources it seems that if you buy property using an SL the tax rate is about 3% instead of about 12.5% if you buy personally. Is that true? It does mention however, that you need to sell the property you buy through the SL with the 3% tax within 5 years or else you need to pay the difference to match the 12.5%.
This sounds too good to be true. I know there are some contingencies such as that you need a minimum cash amount on your business account, have an ‘administrator,’ pay different taxes (with official auditor report), etc.
It would be great to learn more from you in case you have more information around this topic.
- April 16, 2017 at 9:36 pm #198911
The usual transfer tax is 8% but when you buy for an SL the rate is 2%. This is, however, not meant to apply to your own residence but rather to rentals. The SL has to be a specifically real estate investment company. Talk to a lawyer before you jump into this.
- April 16, 2017 at 9:41 pm #198912
Great. Thanks for the reply. That is much appreciated. I definitely will talk to a lawyer on this. Moreover, I heard that you need to sell the apartment you bought at 2% within 5 years. If you have any other tips/thoughts then please do share. Thanks.
- April 17, 2017 at 12:26 am #198913
As far as I understand (please check this) you don’t have to sell unless you have proof of rental for the period. Of course, this would apply to long-term owners only.
If you’re into making a quick profit on a fixer-upper project or the like they’d tax you accordingly for it. So if you’re buying cheap make sure they accept all the money is above the board.
- April 17, 2017 at 11:29 am #198915
Even if you don’t rent it out, you can be taxed on the notional income that you would have gained. Same for the car ling in the garage. Its a rental company and so the tax man assumed that’s what’s happening.
- April 17, 2017 at 11:45 am #198920
I think the original question was about the funds transfer tax. Taxation of your rental income is another thing. So whatever you do the taxman will have his share. You do save a lot of money, though, by operating with a real estate investment company. Long-term planning is essential here.
- April 17, 2017 at 7:38 pm #198923
Thank you all. If anyone has additional thoughts/knowledge on this topic then please do share.
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