In the article from De Tijd: ‘Zo investeert u zonder zorgen in vastgoed om zelf van te genieten’ discusses in detail what you should consider when buying a second residence - whether in Belgium or abroad. The article highlights that many buyers see their second home as a source of relaxation and precious moments, but the financial reality should not be forgotten.
Real Estate Acquisition Process
This article provides valuable information on the various aspects of the acquisition process abroad. Key points to consider include:
- Taxes and other costs: It is essential to understand the taxes applicable to the purchase, any rental income, and inheritance tax. This applies to both domestic and international investments.
- Inheritance tax optimization: If a property is fully in your name, it may be included in your estate, resulting in high inheritance taxes for your heirs.
- Split purchase: This structure offers a solution: parents buy only the usufruct, while children acquire the bare ownership. As a result, the usufruct automatically expires upon death, significantly reducing inheritance taxes.
- Estate planning for foreign property: When purchasing a second home abroad, local regulations must also be considered – most countries levy inheritance tax on real estate regardless of the owner's nationality.
This information applies to several countries, including Spain, Portugal, France, and Italy. For those considering a vacation home in Spain, Carl Vorsselmans and Filip Berger from NB-Estates provide crucial insights into how the Spanish real estate market works.
Rental permit
Carl Vorsselmans explains that in Spain, besides the usual fiscal considerations, there are also specific rules regarding rental permits. "For example, in the Balearic Islands, the rental permit is linked to the property," says Vorsselmans. "This permit is transferable. This can result in a 40% price difference between two identical properties, depending on whether or not they have such a permit. In the Canary Islands, however, this permit is not transferable upon sale and must therefore be reapplied for."
What do you want to buy?
"Many buyers simply want to diversify their investment portfolio and make a good investment," says Vorsselmans. "They look for real estate in a prime location and expect its value to increase. They visit it themselves and often do not consider renting it out."
"However, people who know exactly what they want from the start are in the minority," says Filip Berger from NB-Estates "Most clients hesitate, which is understandable. Often, they seek a second home for personal use but also want to rent it out a little because the income is attractive. This creates a tension, as what is good for rental may not be what they are looking for themselves. It is our job, through discussions, to clarify their final preference."
How long are you willing to wait?
The question is whether you want to enjoy your second home as soon as possible or if you are willing to wait for an off-plan project that has yet to start. If you have the time to wait, there is a good chance you can achieve an added value between signing the contract and delivery. "In Spain, for example, there is a significant difference between the two," says Vorsselmans. "It's a business model in itself."
But Vorsselmans notes that this way of buying real estate is not for everyone. "People who have already made an emotional decision to buy often do not want to wait two years. For example, I had a 70-year-old client to whom I explained the advantage of waiting two years, but he responded: ‘It’s nice of you to suggest it, but for me, two years feel different than for you.’"
Source: De Tijd