When purchasing commercial property, an investor must decide whether to register the asset under a company or as a private individual. This choice affects taxes, profitability, and capital protection.
Purchase Through a Company
Advantages:
· Broad opportunities for tax deductions (depreciation, related expenses)
· Operating expenses are fully deductible
· Flexibility in tax planning
· Asset protection
Taxation:
· Rental income is taxed as corporate income
· Maintenance and management expenses are fully deductible
· VAT recovery is possible (under certain conditions)
· Capital gains are included in corporate income
Purchase as a Private Individual
Advantages:
· Simpler ownership structure, without corporate procedures
· Possible VAT and registration tax benefits under certain conditions
· Simplified taxation system
Disadvantages:
· Limited tax deductions (usually only mortgage interest)
· Maintenance and repair expenses are not deductible
· Rental income is taxed as personal income
· Fewer opportunities for tax optimization
When It Is Beneficial to Buy Through a Company
Purchasing property through a company becomes a strategically correct decision if:
· The property is used for commercial rental or investment
· Capital needs protection from entrepreneurial risks
· Tax optimization of income is important
· Efficient tax planning is required
Real Estate Holding Company
Among all available forms, the most advanced and comprehensive tool is considered to be the real estate holding company (holding immobiliare).
What is a real estate holding company?
A holding immobiliare is the most effective legal entity for purchasing real estate on behalf of a company. It allows:
· Acquisition and management of real estate
· Protection of investments from external risks
· Organization of asset transfer to the next generations
Types of Companies for Property Acquisition
Partnerships (società di persone):
· Società Semplice (SS): minimal management costs, suitable for family-owned assets
· SNC (Società in Nome Collettivo): more formalized management, joint liability
· SAS (Società in Accomandita Semplice): combines limited and unlimited liability
Capital Companies (società di capitali):
· SRL (Società a Responsabilità Limitata): optimal for small and medium-sized businesses, limited liability
· SPA (Società per Azioni): joint-stock company for large investment projects
Conclusions
For long-term investment properties, purchasing through a company provides more advantages: asset protection, tax deductions, and flexibility in planning.
Contact us for assistance in selecting and managing the purchase of real estate in Italy — whether residential or commercial. We will find the optimal solution, taking into account all tax and legal aspects.
