Buying Real Estate Through a Company – A Smart Move or a Hidden Cost?

Buying Real Estate Through a Company Can Be an Excellent Way to Optimize Costs Long-Term and Ensure Business Stability.
However, before making a decision, it is important to understand the tax advantages, depreciation rules, as well as the limitations related to VAT deduction.

1. TAX INCENTIVES AND DEPRECIATION

Purchasing real estate through a company provides significant tax benefits, as the property is recorded as a fixed asset and subject to depreciation.

According to the regulations effective from January 1, 2025:

• The tax depreciation rate for commercial and residential buildings is 2.5% annually.
• Maintenance, insurance, renovation, and utility costs may be recorded as business expenses, further reducing the tax base.

2. VAT DEDUCTION – ONLY FOR FIRST SALE

One of the key questions when purchasing real estate is the right to deduct VAT.

A company may claim a VAT deduction only if:

• it purchases commercial space from a legal entity that is a VAT payer,
• and if it is the first sale of the property.

No right to VAT deduction exists:

• if you purchase property from a natural person or a property that has already been traded,
• if you purchase an apartment or a house – regardless of the purpose or the seller.

3. REAL ESTATE TRANSFER TAX

Additionally, when acquiring real estate, the buyer pays tax according to progressive rates:

• up to €150,000 – 3%
• from €150,000 to €500,000 – €4,500 + 5% on the amount exceeding €150,000
• over €500,000 – €22,000 + 6% on the amount exceeding €500,000

Important: If VAT is paid during the purchase, real estate transfer tax does not apply.

4. ANNUAL PROPERTY TAX

After the purchase, the company is obligated to pay annual property tax.

• The tax base is determined based on the accounting value of the property shown in the company’s business records as of December 31 of the previous year.