Buying & Selling Real Estate
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
Updated about 5 years ago,
Sole trader AND llc: consequences for VAT / Sales Tax
After calculating my business plan, I found out that taxation is quite killing for business.
I wanted to set up an LLC to get more capital, to get around the 45% limitation for individuals. I'll then be able to get two apartments.
What happens then is that I have one privately owned apartment (can't move to LLC due to mortgage), and an LLC with 2 apartments.
The separate "entities" (sole proprietor and LLC) generate less income than the VAT / Sales Tax threshold.
However, both entities combined will. This of course will force me to charge VAT, making my "product" less attractive etc.
I didn't intend to "disaggregate" with a company on purpose, but there may be a chance the tax office thinks differently...
Especially if I'll have to use private money to (potentially) back-stop the negative cashflow of the LLC...
Anyone any experience with being Sole trader AND having an LLC to rent out property?