I see nothing wrong with the concept of the project; however I have raised the issue of the refund of IVA (or VAT) and to date not received a reply.
My understanding is that you can reclaim IVA up to five years on any monies where you have charged IVA i.e. rental income. The same way as UK businesses (who are registered) can claim.
However, let’s look at the numbers; let’s say the property costs 280.000 euros, the IVA at 7% works out at 19.600 euros. This means in order to claim your IVA back you would need to generate rental income over the next five years of 280.000 euros or 56.000 euros a year (or more). Because you are claiming IVA, you will also be subject to local taxes and require a “gesteria” – tax accountant.
I would expect the most optimistic would question whether it was possible to generate rental income in excess of 1.000 euros per week every week for five years.
Incidentally, I was due an income tax refund in June 2003, I actually received it in December 2005.