-
The property investment company then makes the purchased building available on a
lease
.
-
Drawbacks:
- the purchase costs and loan interest are not deductible from the business results.
- the building cannot be amortized
-
Advantages:
- In theory, the professional building is protected from any legal proceedings that may affect the business loan interest is deductible from property income
- if the building is sold and subject to the income tax scheme (option à l’impôt sur le revenu) having been adopted, the capital gains tax payable is the same as for private individuals: complete exemption after 22 years' holding (30 years for social security contributions).
- the property investment company may be used as a business property management tool that facilitates transfers to your children.
-
Only an individual, in-depth analysis of your property situation will, however, determine whether it is advisable to set up a property investment company.
-
Should you decide to go ahead, you will have to be extremely careful when drawing up the articles of association and commercial lease, hold general meetings and keep separate accounts.
-
The appropriate tax system (option for corporate tax rather than income tax), funding method (standard loan or leasing) or other more unusual means of purchase (building lease, long lease, etc.) also have to be examined.