We are often asked whether it is opportune to invest in Spanish real estate with a Belgian company. In practice, it usually turns out that it is not. Therefore, in this post you will find explanations about buying Spanish property with a Belgian company.
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First, you need to decide for yourself what you will do with the property. Will you use the Spanish property mainly as a second residence? Are you planning to live there? Or will you consider it purely as an investment.
You will use the Spanish property mainly for private purposes
In case you are going to use the property mainly and free of charge for private purposes, this is subject to a benefit in kind or benefit in kind in your personal income tax. This benefit must be proportional to your actual performance for the company and can be calculated in various ways. For example, on the basis of foreign cadastral income. However, the calculation of benefit in kind can be disputed. In principle, the cost of the property is deductible in accordance with Spanish regulations.
In case you will rent the property from your company, there is no benefit in kind provided the rent is market-based and effectively paid. However, the Spanish government will tax this rental income because your company is considered a non-resident.
For these reasons, it often turns out that an investment in a second residence is better not done by your Belgian company.
You view the Spanish property as an investment or yield property
In case you will mainly rent out the property, you should be able to sufficiently demonstrate the rental activity. Does such investment bring sufficient return to the company? In addition, the company's property portfolio is considered. Are any properties already being rented out? If there is a patrimony company with several real estate investments, it may be useful to buy the Spanish property with your Belgian company. This may also have advantages from an inheritance planning perspective.
Note: your Belgian company will be taxed in Spain like a non-resident. In addition, as a shareholder of a company with Spanish assets, you will potentially also be pay capital tax.