investment properties

Should I buy investment properties through personally or through my company?

Investment properties are usually bought as a 2-fold purpose: Firstly due to potential rental income and secondly in a hope they will appreciate in value.

First we will have a look at the rental income element and the difference between buying personally or through a business.

Rental income in almost all countries is subject to tax. Rental expenses (including mortgage interest) can of course be deducted but everything left generally incurs a tax burden.As an individual the gain as a result of the rental income is usually viewed the same way as any other income (such as wages) and taxed accordingly.

This means you need to look closely at the income tax paid. Then you can decide if this is the way to pay the tax on your rental income. Perhaps the rental income will be pushed into a higher tax bracket. As such this means a very high levy is paid on your rental income.

Rental income to a company is subject to corporation tax (once again on the profit element). In some countries if the rent proceeds are not distributed a close company charge may need to be paid.

When deciding the overall tax that will be paid on your company rental income all of these charges need to be compared .

Secondly let’s think about the tax on the appreciation of the property value.

Obviously this only needs to be considered if you are selling the property. Whether you have bought the property personally or as a company; you are typically subject to the same Capital Gains Tax of the country in which the property lies.

Typically this tax is not different whether you own the property personally or through a company.

Something that should be kept in mind is that: when you buy a property personally you own it (or at least you do after paying the loan). But when you buy it through company the company owns it.

Any default in repayment of either situation may result in a re-possession. In the case of a company your liability will be limited to the company.

Find your investment properties on

Leave a Reply

Your email address will not be published. Required fields are marked *