• All
  • Apartment
  • Bungalow
  • Business
  • Business Premises
  • Chalet
  • Country Estate
  • Duplex
  • Flat
  • House with land
  • Penthouse
  • Plot
  • Townhouse
  • Villa

Creating homes...

  • All
  • Apartment
  • Bungalow
  • Business
  • Business Premises
  • Chalet
  • Country Estate
  • Duplex
  • Flat
  • House with land
  • Penthouse
  • Plot
  • Townhouse
  • Villa
News
Know the advantages and disadvantages to buy a house with a company
 07

  NOV

Know the advantages and disadvantages to buy a house with a company

What are the pros and cons of buying a home through a partnership? In which case is it convenient? Although it can provide tax advantages, it is good to know if it benefits us or it is unfavorable, in order to make the right decision.
 
The first thing to be clear about is what equity companies are. They are civil or commercial companies dedicated to the management of assets, formed, most of the time, by securities or real estate. To be considered as such, more than half of its assets will be made up of securities and not subject to economic activity.
 
In addition, it is a legal practice in Spain, even for non-residents.
 
Here we tell you what are the advantages and disadvantages of buying a home with a company:
 
IT IS AN ADVANTAGE WHEN:
 
  • If the buyer has large equity. Homes managed through equity companies are taxed through corporate tax, with a rate of 25%. When an owner is a natural person, the personal income tax can range between 19% and 45%. 
     
  • If VAT is considered a deductible expense, which does not apply when the acquisition is made by a natural person. VAT is applied to new construction homes and amounts to 10% of the total value, but can be reduced to 4% in the case of the special regime or public promotion homes. 
     
  • If the purchase is of properties for rent, it is convenient thanks to the tax credit for the management of said properties. Important: have at least eight homes rented with contracts for periods greater than three years. Under these conditions, the company could benefit from a deduction of up to 85% of the income obtained from the rental. 
     
  • If it can be justified that it has been necessary to carry out adaptation works to put these houses up for rent or the tenants have a disability, this discount could be increased up to 90%. 
     
  • If you want to avoid conflict in the event of inheritances since it offers greater legal security for these purposes. 
     
IT IS A DISADVANTAGE WHEN: 
  • If you have average equity, buying a home with a company is not advisable due to the costs associated with its incorporation. In the case of individuals, they only pay personal income tax when the sale of the home represents a capital gain and the tax rate is proportional to income. 
     
  • If the acquisition is of the habitual residence or a second residence it is not an advantageous option. Although there are common taxes in both cases, such as VAT or Property Transfer Tax, for individuals this operation does not generate income in personal income tax, while a company must invoice a market rent to the partner and the income is taxed at 25 %. 
     
  • Although when buying a home with a rental company we may qualify for significant deductions if we have more than eight leased properties, it is important to bear in mind that, from a tax point of view, the income from the rents is considered to be to stop the organization. This means that if the partner does not want to benefit from them, they must be declared as dividends. 
Buying a home involves handling a lot of information for the transaction to be successful. At Hogar Mediterráneo we advise you and provide the best advice for buying, selling or renting homes.
 
Contact now by e-mail or WhatsApp: +34 637 87 97 80!
 
 

Subscribe

Subscribe to our mailing list and you will be first to receive new properties

Diseñado por CRM Inmovilla
Send this form with your name and phone number and we will contact you as soon as possible.
When you press the button “SEND” you confirm you’ve read, understood and accepted the conditions of our Privacy Policy shown in this LINK

Responsable: XXXXX

Finalidad: To send information about real estate that match the requirements of the client presented by filling this form.

Legitimación: To implement pre-contract measures to the clients request (budget request or information about our professional services).

Destinatarios: This data will arrive at the office and there is no expected data transfer if not for legal obligation.

Derechos: You may use your right to access, modify, suppress, oppose, transfer or withdraw your consent on your personal data through the email XXXXXX@XXXXXXX.es

Responsable: XXXXX

Finalidad: To send information about your property to the real estate agency so it can evaluate if it will offer your property to its clients to try to sell or rent it.

Legitimación: The legitimacy is based on the consent you gave us when clicking the button “I accept the data protection policy”.

Destinatarios: The client’s data won’t be transferred to anyone, if not for legal obligation. The real estate’s data might be delivered to collaborating real estate agencies or published on web pages and real estate portals.

Derechos: You may use your right to access, modify, suppress, oppose, transfer or withdraw your consent on your personal data through the email XXXXXX@XXXXXXX.es

Responsable: XXXXX

Finalidad: To handle information requests through the website, aiming to offer real estate professional services and to give information about what’s requested.

Legitimación: The legitimacy is based on the consent you gave us when clicking the button “I accept the data protection policy”.

Destinatarios: Your data won’t be transferred to anyone, if not for legal obligation.

Derechos: You may use your right to access, modify, suppress, oppose, transfer or withdraw your consent on your personal data through the email XXXXXX@XXXXXXX.es

Responsable: XXXXX

Finalidad: To handle information requests through the website, aiming to offer real estate professional services and to give information about what’s requested.

Legitimación: The legitimacy is based on the consent you gave us when clicking the button “I accept the data protection policy”.

Destinatarios: Your data won’t be transferred to anyone, if not for legal obligation.

Derechos: You may use your right to access, modify, suppress, oppose, transfer or withdraw your consent on your personal data through the email XXXXXX@XXXXXXX.es

We use our own and third-party cookies to facilitate your navigation on the website, learn how you interact with us and collect statistical data. Please read our Cookies Policy to learn more about the cookies we use, their purpose and how to configure or reject them, if you consider it so.
Accept all Manage Cookies Reject