You are considering making a property investment, but you're wondering whether to buy through a company or as a private individual. And how can you best approach the financing? This is a question we at Bookies.finance regularly get from ambitious entrepreneurs. The answer is nuanced, but the private purchase has tax advantages in many cases that you should not ignore.

Why buying private property is often more advantageous

If you buy property as a private individual and later sell it at a profit, in Belgium you basically pay no capital gains tax - provided it is 'normal management of private assets'. In contrast, if you buy with your company, the capital gain is taxed at the corporate tax rate (25%).

There are also differences in rentals. Do you rent privately to private individuals? Then your rental income is taxed at a flat rate via the cadastral income, which is usually more advantageous than the effective tax in your company.

A property held within your company can be harder to sell. A buyer would then have to acquire the shares and would not be able to obtain a mortgage on the property, which is often a stumbling block for private individuals.

The hybrid approach: buying privately with company funds

The question is not always 'either-or'. After all, you can buy property privately and still use your company for financing. Here are the smartest techniques:

1. Optimise current accounts

If you have a positive current account (your company's 'debt' to you), use this amount for your purchase price or renovation costs. This is not taxable income, just your money that you take back.

2. Interim dividend

A dividend or an interim dividend allows you to withdraw money from your company at strategic moments for your property project. Take into account the withholding tax!

3. The thoughtful management fee

By structurally increasing and spreading your management fee, you build private wealth. Combined with a good salary and dividend policy, you strengthen your personal assets, making property financing easier.

4. Loan from the company to private

You can take out a market-rate loan from your own company. Document the terms properly and pay a correct interest rate; that interest is income for the company, but the total cost may be lower than with a bank. That interest for you... company a taxable income, but often still more tax-efficient than direct purchase through the company.

5. The power of an IPT with a reconstruction credit

De allerbelangrijkste techniek om je vastgoed te financieren, zelfs wanneer je privé koopt, is via je Individual Pension Commitment (IPC). With a pension plan for the self-employed (IPT), you, as a company director, build up supplementary pension capital through your company. You can use that capital via a Wedding party loan beforehand. an insurer makes up to 80 to 100% of the future final capital available to you for a real estate project. your company continues to pay the premiums in the meantime. you only pay the interest privately, which is often tax-deductible. with the right insurer, you can therefore invest today, while your company bears the repayments.

When real estate through your company is smart

There are scenarios where purchasing through the company does indeed make sense:

• At professional real estate that you use yourself for your activities
• Wanneer je vennootschap veel liquidity that doesn't want to withdraw you
• At short-term projects with development potential.
• Also split purchases (Full and naked ownership private, usufruct in the company) can be interesting, but require thorough planning.

 

Make an informed choice

The optimal structure depends on your personal situation, your time horizon and your broader wealth strategy. We find that entrepreneurs who buy property privately but make smart use of corporate assets often combine the best of both worlds.

Want to know which approach is most beneficial for your specific situation? Schedule an optimisation meeting with a Bookies advisor. We review your current financial situation, your real estate ambitions and design a tax-smart strategy that maximises both your private and corporate wealth.

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