Concerns When Purchasing a Property under Corporate Name!

Before you invest in real estate, one of the biggest concerns is the type of protection you’ll have and counter measures to take if anything went wrong. To avoid such entanglements, buy real estate under a corporate name that’ll not only relieve you from taxes but you won’t even face any trouble for whatever happens. Business proprietors are always looking for new ways to increase their profit line while keeping overhead cost low. Depending on nature of business, you can also buy a home and save expenses. Things would be in much favor when you’re involved renting, remodeling and reselling homes or investing long-term real estate. Still, there’s much to learn and facts to reveal when purchasing corporate property, find out below!

Documents & Requisites

Fill out necessary paperwork required for instigating a business in your country. Also hire a well experienced real estate attorney or seek expert advice from the internet. Once you’ve all the papers at your disposal, read every single clause carefully before taking initials. If you don’t understand something, ask lawyer for clarification.

Next, open a bank account under corporation’s name which must be different than your personal account. Disconnecting corporation’s and personal assets is an efficient way to safeguard you from possible hindrances. Moreover, it’s to show a bank that yours is a legitimate company hence acquiring loans would be much easier.

Crediting the Bank Account

Prior going for a loan, you better put some money in the bank account to win their trust. Remember, having a corporation doesn’t mean banks are liable to lend you petty cash. They’ll probably scrutinize your overall business success and screen potential owners before landing a loan. Let’s consider you’re interested in villas for sale in Dubai, an amount equal to 20 percent of the original price must be credited in bank account. No need to worry if you’re left empty handed after first purchase, it’s a sign of corporation’s owner is serious about investment that’s the key to get bank’s mortgage approval.

Direct Approach

If your company has a good market reputation, make a direct offer to buy a piece of real estate. Contact broker and show your interest to purchase but don’t leap blindly to any offer. Remember that organizations are catered with discounted price when buying a particular home so talk to property sellers.

Have a Record!

Make a request to closing agent to list your business name as owner of the house on title agreement but in a few countries, it would be recorded as fictitious name. Also, find about possible restrictions when coalescing home title’s with business name. All expenses incorporated with your purchase of the house must be on record.

This is important because your accountant will weigh them against gross sales or receipts to figure tax liability. Since purchasing a home is a major decision, spread out deduction over number of years. Let’s say you’re listing Dubai flats for sale under your company’s name, ensure to keep all the intrinsic record and paperwork.

The Capital Gains Tax

Be ready to pay capital gains tax when reselling a house. Obviously a home is used as a personal dwelling and exempted from capital gains tax to a certain limit. Profit on a house purchased under corporate name is considered a business expense and taxable.

Summary

Provided above are a few steps to consider when purchasing a home under corporation’s name.

This article was written by David Adam, An experienced online marketer.