Buying a vacation rental? This is what you need to know
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- Tax considerations when purchasing a vacation rental
What tax aspects are important to you?
At Oysterduinen, you can buy new, sustainable vacation rentals in Zeeland. Buying a holiday rental at Oysterduinen is a stable way of investing in recreational real estate that will retain its value, and can generate a very lucrative return on investment. If you choose to make the property available for rental, you will enjoy a net return of 7%! When buying a vacation rental, tax considerations obviously play an important role. Which regulations apply to you depends on your personal situation. For example, is it more advantageous to purchase a property privately or through an LLC? And to what extent can VAT be recovered? Our sales consultants are happy to assist and counsel you on the tax considerations in this recreational real estate process.
Vacation rental as a private purchase
Are you considering purchasing a vacation rental as a personal investment? Purchasing a private property in Box 3 at Oysterduinen offers several advantages. For example, by purchasing privately, you can benefit from a more favorable interest rate, AND it is possible to finance up to 90% of the market value in rental condition with a mortgage. The net return can increase as you invest in more properties, and from 4 properties and up, you are considered a professional, which is beneficial with both the bank and in assessing financial risk. However, keep in mind personal liability for possible debts and tax implications, such as paying taxes on a notional return. In addition, our professional rental agency is always committed to maximizing the rental occupancy, allowing you to fully enjoy your investment in a vacation rental.
Summary:
- Lower interest rates
- Your private property
- Possibility of full private use
- Or combined with rental
- Professional rental agency
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Buying a vacation rental through a LLC
If you are considering purchasing a vacation rental through your LLC, Oysterduinen also offers opportunities for commercial investments. With a LLC, you can deduct expenses such as maintenance upkeep, financing costs, interest and more from your sales (rental income). From the very first property, the bank considers you a professional, which brings several benefits. Financing may be different than it would be for a private purchase, with potentially higher interest rates and a maximum mortgage of 85% of market value for recreational properties. However, you enjoy the ability to reclaim VAT on expenses and, in principle, you are not privately liable for any potential debts. The actual return earned is subject to corporate tax, which is a consideration when evaluating one's purchase options. Please feel free to contact us for more information and advice on your specific situation.
Summary:
- Deduct expenses from revenue
- Bank views you as a professional
- VAT recoverable on expenses
- Not personally liable
- Professional rental agency
Want to know more?
Take a look at what Oysterduinen has to offer, or request the brochure and get more information.
Vacation rentals
Frequently asked questions
What tax considerations apply when purchasing a vacation rental?
When buying a vacation rental, tax considerations play an important role. Exactly which tax aspects apply to you depends on your personal situation. Please feel free to contact us for expert advice from our sales consultants.
How profitable is a vacation rental?
The vacation rentals at Oysterduinen offer a fixed net return of as much as 7% when you choose to make your vacation rental exclusively available for rent. Should you still prefer a variable return, it can reach as high as 9%!
What are the benefits of renting out my vacation rental?
Firstly, you generate additional income and a vacation rental is an investment that is expected to increase in value. Secondly, you do not have to pay income tax on the earnings. At Oysterduinen, you also benefit from an extra percentage when you manage to bring in tenants for your vacation rental by yourself.