Buying property abroad: through a company or personally?

Many buyers who live in the EU ask the same question before signing for a property abroad: should the buyer be me, or a company? There is no universal answer. A company can be sensible for a portfolio or a development and a poor choice for a single holiday apartment. This article sets out the points to compare so that you can ask your lawyer and tax adviser the right questions. It is informational, not legal, tax or investment advice, and every rule mentioned should be checked for the country and the year.

What changes when a company owns the property

Personal ownership is simple: you are on the title, you pay tax as a private person, and the property is part of your estate. With a company, the company is on the title and you own shares. Two things follow. The company is a separate legal person with its own accounts and tax return. And your own country may still tax you on what the company pays out, or even on what it earns, depending on its rules for foreign companies.

Points to compare

• Liability. A company can separate the property from your other assets, so a claim linked to the building, a tenant or a guest is aimed at the company first. The protection is limited: lenders usually ask for a personal guarantee, and insurance often matters more than the legal form.
• Tax on rent. A private owner is usually taxed on net or gross rent under personal rules; a company pays corporate tax on profit and then the owner is taxed on dividends. The total can be higher or lower than the personal route, depending on rates, allowed costs and treaties. We cannot give a general answer.
• Tax on sale. A private owner may benefit from holding-period exemptions or reliefs for a home. A company usually has none of these and its gain is simply profit. Selling the company shares instead of the property can be taxed differently again, and some countries tax a share sale as a property sale when the company mainly holds property there.
• Transfer tax. Buying a property directly normally triggers the local property transfer tax or VAT. Buying shares of a company that owns it may be cheaper in some countries and treated the same in others; several countries have rules to stop this being used to avoid transfer tax. Check the specific country.
• Inheritance. Heirs of a private owner deal with the foreign succession rules and the local inheritance tax. Shares in a company can be easier to pass on, but the heirs still need a local procedure, and the company must keep functioning. See also our article on tax residency when relocating.
• Financing. Banks lend to companies on different terms from private buyers, often with a personal guarantee and a larger down payment. For private buyers see mortgages for non-residents.
• Accounting burden. A company has to keep books, file annual accounts, sometimes have an audit, and pay a local accountant and a registered office or director. These costs are fixed whether the property earns or not.
• Registers and transparency. Within the EU and many other countries, the real owners of companies have to be registered in a beneficial-owner register. Public access to these registers was narrowed in many EU states after a 2022 ruling of the EU Court of Justice, but authorities, banks and notaries can still see them. A company does not give anonymity, and it should not be bought for that purpose.
• Anti-avoidance rules. EU and national rules look at the real purpose and substance of a structure. A company set up with no commercial reason except a tax gain can be challenged. See SPV and holding structures.

When a company can make sense

• Several properties held together, with shared management, financing and a later sale of the whole portfolio.
• A development or renovation for resale, where the activity is a business anyway.
• Commercial property or a hotel with employees, operators and contracts; see holding structures and taxes for hotel owners.
• Co-investment with partners, where each holds shares and the agreement sets who decides what.
• Where local law gives non-residents more rights through a local company, for example for certain land purchases. Check that the rule is lawful and current, and see nominee ownership risks.

When it usually does not

• One apartment or house for your own use or a small rental. Fixed costs and double taxation of profits often outweigh the benefits.
• A purchase meant to make ownership invisible or to avoid tax. This is the case in which the structure is most likely to be challenged, and we do not give advice on it.
• A mortgage-funded purchase where the bank prefers a private borrower.
• Property in a country that taxes company-owned residential property at a special rate; see special taxes on company-owned property.

How to decide

Put both routes into numbers with a local adviser: purchase tax, yearly running costs, tax on rent, tax on sale, and the tax in your country of residence. Our calculators and the guide to the total cost of ownership abroad help with the arithmetic. Then ask two questions: what is the business reason for the company, and what happens in ten years when the property is sold or inherited? If the second answer is unclear, personal ownership is usually the safer start.

For the EU-level context on tax transparency, the European Commission's taxation site is a good starting point: taxation-customs.ec.europa.eu.

FAQ

Does a company protect me from all claims? No. It separates the property from your other assets, but guarantees to a lender, your own negligence and gaps in insurance can still reach you.

Is a company cheaper to run than personal ownership? Usually not for one property: accounts, filings and a local representative are fixed yearly costs. It becomes more efficient only when spread over several assets.

Can I stay anonymous behind a company? No. Beneficial owners are recorded in registers and banks and notaries ask for them. Do not rely on a structure for secrecy.

Is selling shares always better than selling the property? Not always. Some countries tax it like a property sale, some charge transfer tax on it, and buyers often pay less for shares because of hidden liabilities.

Will my home country tax me on a foreign company? It may, through dividend, controlled-foreign-company or similar rules. Ask a tax adviser in the country where you are tax resident.

How we help

We are a trilingual platform that finds properties abroad and coordinates independent local lawyers and tax advisers who can compare the personal and company routes for your case. This article is informational and is not legal, tax or investment advice; rules change, so verify the current rules in the country concerned before you decide.