Buying property in Luxembourg through a company: advantages and points to watch

Why buy through a company

Buying property in Luxembourg through a company serves several objectives: facilitating joint ownership, organising succession through the transfer of shares rather than the building itself, isolating risk in a dedicated structure and structuring a rental investment. The company, often a SARL or a SOPARFI where it holds real estate participations, becomes the legal owner of the property.

This arrangement is common for a family project, an investment with several shareholders or holding professional assets. It offers flexibility in allocating rights between shareholders and in organising the governance of the property.

The tax and legal points to watch

Buying through a company is not always advantageous. The tax treatment depends on the nature of the property, its use, the holding period and the profile of the shareholders. The rules applicable to resale, rental income and the transfer of shares differ from those of direct ownership, and the outcome may be less favourable depending on the case.

You must also anticipate the costs of incorporation and operation, the accounting obligations, and the fate of the property in the event of disagreement between shareholders. A poorly conceived structure can block a resale or complicate an exit. Depending on your situation, the trade off between direct ownership and ownership through a company must be costed before the purchase.

The tax team at Cerno Law Firm analyses these factors and a lawyer validates the chosen structure. The firm's digital tools serve only to prepare the meeting, not to provide personalised advice.

Structuring it well from the outset

The choice of company form, the drafting of the articles and, as soon as there is more than one shareholder, a shareholders' agreement determine the success of the project. The agreement organises exits, deadlocks, additional contributions and the management of the property.

It is better to secure these points before signing the notarial deed than to correct them afterwards. A clear structure facilitates financing, succession and, when the time comes, the resale of the property.