Buying property through your company: smart move or pitfall?
September 2025 - For many entrepreneurs, it seems logical: there is often more money in the company than in their personal account, so why not buy property with those funds?
That reasoning sounds appealing, but the tax and legal consequences make the choice less straightforward than it seems at first glance.
The tax benefits at a glance
If your company purchases a building, it can deduct a lot of costs: registration tax, VAT, notary fees, interest, estate agent fees and maintenance costs. Depreciation is also allowed: usually around three per cent per year on the value of the building, excluding the land.
However, these deductions only apply if the property is used for professional purposes, is rented out or is made available to a company director as a benefit in kind. For a property that is used solely for private purposes, the tax authorities will categorically refuse the deduction.
Private use remains expensive
A company property that is used privately leads to additional taxes in personal income tax and extra social security contributions. In addition, a private home offers more protection against creditors through a declaration of exemption from seizure by a notary. This is not possible for a property registered in the name of the company.
The catch: capital gains
The big difference with a private purchase lies in the tax on sale. In a company, capital gains are taxed at the corporate tax rate (25%), after which there is often a further 30% withholding tax if you want to transfer the profit to your private account.
And there's more: the capital gains are not calculated on the original purchase price, but on the book value after depreciation. Suppose your company buys a property for 600,000 euros and already depreciates 200,000 euros. It is then recorded in the books at 400,000 euros. If you later sell it for 900,000 euros, the taxable capital gain is 500,000 euros, not 300,000 euros. In contrast, as a private individual, you do not pay tax on the capital gain if you have owned the property for at least five years (or eight years in the case of building land).
Renting out: company or private?
Renting out through a company can be interesting if the tenant uses the property for professional purposes. However, if it is rented out to a private individual for private use, it is usually more advantageous to own the property privately. After all, a private individual is not taxed on the actual rental income, but on the indexed cadastral income, increased by 40 percent. This is often much more favourable than corporation tax.
Inheritance and gift tax: more complex through a company
Passing on real estate to the next generation through a company is not that simple. This is often done through a donation of the company's shares, but then you also inherit the latent capital gain for tax purposes. Selling the company is an alternative, although the new rules from 2026 onwards may lead to higher taxation.
A tailor-made approach is crucial
If you want to use a property purely for private purposes, it is usually better to buy outside the company. The financing may be more expensive, but you avoid the pitfalls of capital gains tax and enjoy better protection in the event of death or bankruptcy. For mixed formulas – for example, buying privately and renting to your company – there are possibilities, but the tax authorities set clear limits.
Buying property through the company can therefore be interesting from a tax point of view, but only in the right circumstances. Every situation is unique, and a preliminary discussion with your bookkeeper or accountant will save you expensive surprises later on.
