Property investment in an EU country

**Lance** · 1 September 2021, 10:37

Originally posted by fotistso View Post

Anything else I should consider?

Absolutely shed loads of things.
Local laws for a start. What country are we talking here? Are you sure it's even legal? Or are you assuming it's legal in the country you are planning because it is in the UK (that could be a terrible assumption).
Insurance.
Local taxation (rates etc.)

To my mind this is a dumb idea. But if you really want to pursue it then research in forums for property rentals in the country you are thinking about.

And why would you do this in a foreign country in the first place? Sounds like an awful lot of complexity for an investment. Or is investment not your primary reason? Perhaps you are thinking of buying a nice holiday let avoiding a tulip load of tax, that you intend to use yourself (which would be a benefit in kind).

You should really just take the cash, pay the tax, and buy the holiday home of your dreams.

**northernladuk** · 1 September 2021, 11:10

Originally posted by fotistso View Post

I am considering buying a property through my Ltd company (IT contractor) in an EU country. I was wondering if anyone has any advise or anything in particular to consider?

Advice
Don't do it. All the advice to date is to not buy property through the LTD. Search the forums to check as it's been covered a load of times. Use the google method not the forum search. Type <keywords> site:forums.contractoruk.com in google.

I have enough funds in my ltd company to buy the property and I plan to rent it via an agency.
The main reason for considering this is that I can claim back the VAT on the purchase (20%) and all maintenance expenses (via the 13th Directive process)
What I am not sure about is what happens with VAT on short term rentals. If I let it out via e.g. booking.com or airbnb, do I have to charge VAT in addition to the daily rate and pay it back? Would I need to pay the VAT in the UK (since my ltd company is a UK company) or in the country that the property is?
Anything else I should consider?

There is VAT on a property purchase?
You can claim expenses, you can't claim stuff that improves the property. Renovations like new kitchens etc are not allowed.
You might have forgotten you will be taxed on any profits you make and absolutely roasted when you try and get the money out of the company as well.
Then there is all the nightmare of the foreign side of it which will be a major headache
You can't close your LTD down while it holds the property either

Don't do it. Get the money out and buy it personally.

**northernladuk** · 1 September 2021, 11:14

You asked a similar question in 2017 you know?

https://forums.contractoruk.com/acco...ctivities.html

**fotistso** · 1 September 2021, 12:06

Thank you all for the advise. northernladuk back in 2017 I was considering buying a property in the UK and abandoned the ideas as I needed a mortgage which is more difficult to get through a ltd company. Since I don't require a mortgage now I assumed it would be much easier but it seems like everyone's advise is against it.

**eek** · 1 September 2021, 12:52

Get a decent accountant to explain to you why it's a crap idea because it's a crap idea.

The only reason for buying property via a limited company is for mortgage interest tax relief and even then I don't think the logic works.

**JHamp82** · 1 September 2021, 13:26

In my opinion, generally Ltd company is only beneficial if you are in the higher rate bracket and you will be using a mortgage to buy the property as mortgage gets deducted against your rental income in the company but if you are buying a property on cash then it may not be a good idea to buy through a limited company. Careful planning will be needed here. I'd say speak to a specialist accountant.

With regards to the VAT. Unless you are buying a commercial property or holiday lets etc, you don't have to charge VAT on rental income and if you don't charge VAT then you cannot reclaim VAT on associated expenses. Also as far as I understand, buying a property in EU won't have any impact on the VAT as this will be outside of the scope of UK VAT anyway?

**northernladuk** · 1 September 2021, 13:33

Originally posted by fotistso View Post

Thank you all for the advise. northernladuk back in 2017 I was considering buying a property in the UK and abandoned the ideas as I needed a mortgage which is more difficult to get through a ltd company. Since I don't require a mortgage now I assumed it would be much easier but it seems like everyone's advise is against it.

ADVICE!!!! You did that on purpose didn't you?

Property investment in an EU country