Buying Property Through a Company or as an Individual — Tax and Legal Guide

Buying a property is one of the biggest financial decisions, and the question of whether to buy it through a company (legal entity) or as an individual is often raised. Investors, entrepreneurs and diaspora are especially interested, because it affects taxes, maintenance costs, the ability to sell, and inheritance. In this article we analyze both options in detail.

Why This Question Matters

The way you buy property is not just a technical detail. It shapes:

• Tax obligations — how much you pay on purchase, while holding, and on sale
• Legal risk — how the asset is protected in case of disputes or bankruptcy
• Financial flexibility — how you can use the asset and whether it can be used as loan collateral
• Transferability — how the asset is inherited and sold in the future

The right choice depends on your specific situation, plans, and the type of property.

Buying as an Individual — Pros and Cons

Pros

1. Simplicity — Buying in the name of an individual is procedurally the simplest. Only an ID is needed, and the notary handles the whole process.
2. Tax exemption after 10 years — An individual who held the property for more than 10 years is fully exempt from capital gains tax on sale. This is the biggest advantage.
3. Lower maintenance and administrative costs — No accounting obligations, no VAT on rental services (up to the threshold), and less bureaucracy.
4. Privacy — Properties owned by individuals are less exposed to public scrutiny than corporate assets.

Cons

1. Limited tax planning — Gain on sale is taxed up to 15%, and the ability to offset investment costs is more limited.
2. Personal liability for the whole asset — The owner personally answers for all obligations related to the property (loans, taxes, disputes).
3. Harder to transfer ownership — Transfer requires selling the property itself (with taxes), not selling shares.

Buying Through a Company — Pros and Cons

Pros

1. Asset separation — A property held by a company is protected from the owner’s personal liabilities, reducing personal risk in disputes or debts.
2. Deductible business costs — The company can deduct maintenance, renovation, loan interest and depreciation, lowering its taxable base.
3. VAT benefits — When buying new-build from a VAT-registered developer, a VAT-registered company can often reclaim the VAT portion.
4. Ownership transfer via shares — Ownership changes are done by transferring shares, avoiding property transfer taxes in many cases.
5. Centralized management — Suitable for investors owning multiple properties consolidated under one entity.

Cons

1. Profit tax on sale — On sale, the company pays corporate profit tax (15%), and distributing the profit to shareholders is taxed again.
2. Administrative burden — Ongoing bookkeeping, annual reports and tax compliance add costs.
3. Less favorable for personal residence — Using a company-owned property for personal living complicates taxes and limits deductibility.
4. VAT on rental — Renting through a company may trigger VAT registration, raising prices for tenants.

Key Tax Differences

When to Choose a Company vs. an Individual

Choose a company if:

• You buy for investment/rental, not personal residence
• You have multiple properties and want centralized management
• You want to protect personal assets from business risks
• You plan to transfer ownership via shares
• You are VAT-registered and buying new-builds

Choose an individual if:

• The property is for personal residence
• You plan to hold it longer than 10 years (tax exemption)
• You want simplicity and lower administrative costs
• Sale is expected only after a long holding period

Tips for Investors

1. Plan your exit strategy — Selling shares is often more tax-efficient than selling the property.
2. Consult a tax advisor — Different structures (VAT system, LLC) change the numbers significantly.
3. Align purchase with financing — Loan interest is a deductible cost for companies, unlike for individuals.
4. Plan depreciation — for new-builds, depreciation can significantly lower taxable income.
5. Separate personal from business — don’t put a personal residence in a company without tax justification.

Conclusion

There is no single “best” answer. For long-term residence, an individual purchase is usually better due to the 10-year exemption; for investment properties, a company often offers more flexibility through depreciation, asset protection, and transfer mechanisms. Always consult a tax advisor and lawyer before deciding.