What about taxation when investing in real estate abroad? What are the things to consider and what percentages can you expect to pay? In short, what are the tax advantages of investing abroad?
Lower registration fees of foreign property
Depending on which country you invest in foreign real estate in, you will enjoy substantially lower registration duties than the rates applicable in Belgium. Thus, with the markets that MOMO estates mainly focuses on, you should consider respectively:
- Property in Germany: on Germany's real estate, you pay registration fees between 3.5% and 6.5%, depending on the region where the property is located. The applicable VAT rate in Germany is 19%.
- Dutch property: property in the Netherlands is subject to only 12% VAT and 10.4% registration fees.
To compare the cost of buying Belgian real estate; here you pay 21% VAT and 12% registration fees. The tax advantage of such a foreign property investment is immediately obvious.
Other tax consequences of investing abroad
When investing in real estate in a country with which Belgium has tax treaties, you enjoy an exemption from registration duties, property tax, rental income taxes and capital gains tax in Belgium. This means you will be taxed in the country where your property investment is located.
You see, by investing in real estate in the right countries, you not only generate a good rental return and a substantial capital gain, you also benefit from a favourable tax climate. MOMO estates will be happy to show you how an investment abroad can also be interesting for your investment portfolio. Would you like more information? Contact us!