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I am not a tax specialist, nor do we know which country we are discussion (EU, US, Australia, like in the post). But it may make more sense to buy real estate

I am not a tax specialist, nor do we know which country we are discussion (EU, US, Australia, like in the post). But it may make more sense to buy real estate to rent out to others and live somewhere else for rent. If a company holds a few apartments (and getting rid of non-paying renters can be tricky in some jurisdictions) then you can deduct interest payments, repairs etc. If you live in your own house I don't know how much you can deduct mortgage payments. And if you need a new roof then you have to pay for this by your after tax income salary. Big difference. I am eyeing a loft in an EU country. I wish I had the money to buy it, renovate it and making loft apartments out of it. One I would rent for myself (from my company).

labawi 6y ago
I still don't understand how would it be cheaper if you're paying rent with money that was already taxed - deductions would only make sure it's not taxed again. Maybe you could avoid paying VAT? Another situation would be if your company is financing the apartment directly with pre-tax money that didn't make a round-trip as income, though that's quite a different situation than most rentals, and may be a big no-no (or may be acceptable in your jurisdiction - no idea).
- pacman2 6y ago
  You earn 100k as a wage slave. After 30% Tax 70k. (Random numbers). Now you pay for your roof 40k. You have 30k left. (Likely your would take a loan but lets ignore this now). The bottom line: You pay 30k in taxes and 40k for the roof and have 30k left. Landlord has 100k rental income. To make it simple, he has to pay 30% tax too. But he has now another bisness expense of 40k for the roof, so he gets only 60k income. Not he pays 30% income tax on that, so he has only 42k left. But this is 12k more than you because the roof was a business expense.
  - seanmcdirmid 6y ago
    The landlord doesn’t get to deduct expenses on their own residence. They can deduct expenses on other people’s residences for sure, but one end or the other is taxed at 30%. The landlord isn’t coming out ahead unless they are able to fudge numbers on their taxes in the confusion of their more complicated tax return. They can also deduct 25k in losses over rental revenue from personal income given lots of rules (like you can’t make more than $100k to get the full deduction and it phases out after $150k).

labawi 6y ago

I still don't understand how would it be cheaper if you're paying rent with money that was already taxed - deductions would only make sure it's not taxed again. Maybe you could avoid paying VAT? Another situation would be if your company is financing the apartment directly with pre-tax money that didn't make a round-trip as income, though that's quite a different situation than most rentals, and may be a big no-no (or may be acceptable in your jurisdiction - no idea).

pacman2 6y ago
You earn 100k as a wage slave. After 30% Tax 70k. (Random numbers). Now you pay for your roof 40k. You have 30k left. (Likely your would take a loan but lets ignore this now). The bottom line: You pay 30k in taxes and 40k for the roof and have 30k left. Landlord has 100k rental income. To make it simple, he has to pay 30% tax too. But he has now another bisness expense of 40k for the roof, so he gets only 60k income. Not he pays 30% income tax on that, so he has only 42k left. But this is 12k more than you because the roof was a business expense.
- seanmcdirmid 6y ago
  The landlord doesn’t get to deduct expenses on their own residence. They can deduct expenses on other people’s residences for sure, but one end or the other is taxed at 30%. The landlord isn’t coming out ahead unless they are able to fudge numbers on their taxes in the confusion of their more complicated tax return. They can also deduct 25k in losses over rental revenue from personal income given lots of rules (like you can’t make more than $100k to get the full deduction and it phases out after $150k).