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Home in Belgium tax question
Posted on 8/13/22 at 7:18 am
Posted on 8/13/22 at 7:18 am
I’m looking at buying an apartment in Belgium. Probably stay there two weeks a year and rent out the rest of time. I would definitely be there less than 10% of rental time. I know Belgium and US have tax treaty. Seems like I would be able to report rental income to US for tax purposes, deduct any Belgium property tax and expenses, and not be taxed by Belgium on income.
Anything I’m missing here from people with knowledge of European real estate? Am I better doing this as LLC? Also, would this be a tax nightmare if I included a family member (not wife) on the title? Thanks for your insight.
Anything I’m missing here from people with knowledge of European real estate? Am I better doing this as LLC? Also, would this be a tax nightmare if I included a family member (not wife) on the title? Thanks for your insight.
This post was edited on 8/14/22 at 9:17 am
8
Posted on 8/13/22 at 7:57 am to Drizzt
At 2 weeks I’d rent.
Posted on 8/13/22 at 9:30 am to Drizzt
Have you really thought this through? Why buy a place in a foreign country to only use 2 weeks a year? And who are you going to rent it to? Short term Air BNB type rentals? You are going to have to pay someone to manage and take care of it. What a huge hassle.
Posted on 8/13/22 at 9:39 am to SloaneRanger
Yeah, what the draw here OP? Just to simply say you’ve got a home in Belgium?
Bruges is an amazing place to visit. It’s like entering a storybook. But it’s also tiny and visiting for an extended time feels like it would ruin the enchantment.
Bruges is an amazing place to visit. It’s like entering a storybook. But it’s also tiny and visiting for an extended time feels like it would ruin the enchantment.
Posted on 8/13/22 at 10:51 am to Drizzt
For two weeks a year, renting a home is a much better option at face value. It gives you flexibility to explore different cities within Belgium.
I lived in Belgium for a month in college on a study abroad…awesome experience. Love the country and it sparked an international interest that I didn’t know existed. I also got to taste great beer for the first time and I’m forever thankful for that contribution
What city are you wanting to buy in?
I lived in Belgium for a month in college on a study abroad…awesome experience. Love the country and it sparked an international interest that I didn’t know existed. I also got to taste great beer for the first time and I’m forever thankful for that contribution
What city are you wanting to buy in?
Posted on 8/13/22 at 10:52 am to TigerDeBaiter
quote:
Yeah, what the draw here OP? Just to simply say you’ve got a home in Belgium?
What if he’s making 18% cash on cash return?
Posted on 8/13/22 at 12:43 pm to Drizzt
quote:
would definitely be there less than 10% of rental time.
So it's not a rental, it's an Air BnB. Who exactly is going to manage this while you live in the USA? Like what if i kick holes in all the walls and steal everything. How you gonna know?
Posted on 8/13/22 at 3:12 pm to j1897
My sister married a developer there. He is building in the museum area of Antwerp and offered to sell us a unit at cost. My father and mother will use it to visit. Sister can manage it for me. I expect the property to appreciate significantly as there is a huge park being built across the street and it’s a prime location. Planning on 28 day minimum AirBnB rentals when not in use. Met a guy there who does this there and says he is always booked.
Didn’t want to give a huge story but a lot of people seem to be focused more on why I would buy instead of my original question of what are potential tax issues. Taxes is my main question.
Didn’t want to give a huge story but a lot of people seem to be focused more on why I would buy instead of my original question of what are potential tax issues. Taxes is my main question.
Posted on 8/13/22 at 5:06 pm to Drizzt
quote:
Didn’t want to give a huge story but a lot of people seem to be focused more on why I would buy instead of my original question of what are potential tax issues. Taxes is my main question.
Seems like you might want to ask a tax attorney in Belgium and one in US… not some dudes on the internet if you were serious about this
Posted on 8/13/22 at 5:28 pm to Drizzt
quote:
Met a guy there who does this there and says he is “always”booked.
“Always” seems unrealistic.
Posted on 8/13/22 at 9:27 pm to Drizzt
quote:
My sister married a developer there. He is building in the museum area of Antwerp and offered to sell us a unit at cost. My father and mother will use it to visit. Sister can manage it for me.
Why would she? This is likely a bad idea. If it’s a rental actually staying busy and making money it’s not a 30 min a week type of thing, it could be a huge pita for her if her husband is making enough money to sling you a deal ‘at cost’.
I don’t know how international taxes work with belgium but my general understanding is the US doesn’t give breaks for international income so you have to potentially pay anything owed to Belgium Plus US taxes.
I’m not sure how US tax code is on international vacation rentals. I’m assuming it would be more taxed as just an international business income?
Posted on 8/13/22 at 9:43 pm to baldona
quote:
Anything I’m missing here from people with knowledge of European real estate?
I specifically asked people with experience owning a home in Europe for anything unexpected they might have encountered. I’ve seen multiple posts from guys who own international real estate on MT so I thought someone might have some useful knowledge. I’m actually pretty sure that you don’t pay any Belgium income taxes since you are taxed where you are a citizen. Property tax is only $800 a year because Belgium only taxes land value and not structure. Just thought I’d see if anyone here had actually done this.
This post was edited on 8/13/22 at 10:14 pm
Posted on 8/14/22 at 7:17 am to Drizzt
Update your title to say tax question also and you may get a better response from people that know.
Posted on 8/14/22 at 8:38 am to Drizzt
I know and I get it. But owning something in South America and the Carribean is a lot different then Europe most likely. There’s some posters that have lived in Europe or still do so they may have some experience.
I’d suggest looking up apt leasing companies/ vacation rental companies. And get their feed back.
Something to consider is just because your BIL will sell you something at a good price doesn’t mean the ROI is going to make sense over something that’s more expensive. I see this all the time; people buying a vacation rental for a certain reason like price, location to them, etc and the rental numbers not making sense over something of equal value elsewhere.
ETA: I’m by no means saying this is suspicious, but I’d double check the prices for other homes. I like my family but I would never give them a business deal ‘at cost’ for something like $200,000 deal. Maybe he is still making 10% and not 20% or whatever? Again not accusing him of anything, just be damn careful this isnt being done for something like apt sales have tanked and he needs to move inventory quickly.
I’d suggest looking up apt leasing companies/ vacation rental companies. And get their feed back.
Something to consider is just because your BIL will sell you something at a good price doesn’t mean the ROI is going to make sense over something that’s more expensive. I see this all the time; people buying a vacation rental for a certain reason like price, location to them, etc and the rental numbers not making sense over something of equal value elsewhere.
ETA: I’m by no means saying this is suspicious, but I’d double check the prices for other homes. I like my family but I would never give them a business deal ‘at cost’ for something like $200,000 deal. Maybe he is still making 10% and not 20% or whatever? Again not accusing him of anything, just be damn careful this isnt being done for something like apt sales have tanked and he needs to move inventory quickly.
This post was edited on 8/14/22 at 8:42 am
Posted on 8/14/22 at 7:59 pm to Drizzt
quote:
I specifically asked people with experience owning a home in Europe
Supposedly owning a home in Europe.
Posted on 8/15/22 at 9:09 am to Drizzt
Hell that changes things - do it, but wait to pay until it’s mostly built. Don’t get trapped in a family construction quagmire.
Posted on 8/15/22 at 9:27 am to baldona
quote:
I don’t know how international taxes work with belgium but my general understanding is the US doesn’t give breaks for international income so you have to potentially pay anything owed to Belgium Plus US taxes.
You have to try to be wrong on purpose with your hit rate
Posted on 8/15/22 at 9:39 am to Drizzt
I hope the Belgian government forces you to take in refugees
Posted on 8/15/22 at 10:13 am to Drizzt
quote:
Seems like I would be able to report rental income to US for tax purposes, deduct any Belgium property tax and expenses, and not be taxed by Belgium on income.
I have not researched it, but my impressions are this:
1. As a US citizen, you have to report 100% of all income earned wherever. So you report Belgium rental income (less deductions).
2. Belgium would also tax your Belgium rental income, but not your other income (because you aren't in their country long enough).
3. You get a foreign tax credit on your US return for any income taxes paid in Belgium to avoid (or significantly reduce) the double taxation of your Belgium rental income.
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