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Is it better to buy in your own name with through a commercial partnership?

The answer is not just one and has several nuances, that will depend on many factors regarding the purpose of the purchase and the particular situation of each person, But in general we leave you some answers that are the basis for any approach regarding buying in a particular way or setting up a company with that objective.

Regarding the tax assessment scales, Legal persons are taxed at the proportional rate of the 25%, while natural persons are taxed with the progressive scale and the average rate of taxation will depend on of the rest of the income that the taxpayer has.

Regarding the costs that can be discounted by individuals, we can analyze on the one hand the purchase of the house and on the other, put that house for rent once it is acquired:

If we talk about the acquisition price of the property, the following issues will have to be taken into account:

- If the property is new and is bought by a company, VAT could be deducted from the purchase, while if a natural person buys it, no.

- If the property is second-hand, in this case, is taxed by ITP -AJD (Property Transfer Tax – Documented legal act -Junta de Andalucía Tax) and would be a higher acquisition value of the property and in no case could be deducted.

If on the other hand, we are evaluating buying the house for later, put it up for rent, we would talk about the deduction of expenses once rented:

- In the case of the company, all expenses related to the activity carried out and necessary to obtain benefits may be deducted.

– In the event that it is the natural person who rents the property and whenever it is intended for habitual residence (not vacation) has a reduction in the net return of the 60% and can be deducted, on the one hand the interest paid for the acquisition and the repair costs (not the improvements of the property) with the limit of the income received from the rent and on the other hand, "other deductible expenses" (without limit) that are necessary for the rent, such as the minimum amortization (3% of the highest V.Adq. o Cadastral excluding land) and IBI, community expenses ...

Regarding the interests for the loan between partner-society, interest would be deductible for the Company and must be declared as income from movable capital for the lender (at market value because they are related transactions). Being for it, esta una opción bastante apetecible para inversores.[/vc_column_text][/vc_column][/vc_row]