Share this content
10

Can you buy a flat to use as an office?

Client has rented office in Hungary, wants to replace it with purchased flat

Didn't find your answer?

My self-employed client uses freelancers in Hungary and is considering buying a flat there to use purely (100%) as an office. I asked why a flat and he sent me the following reasons

  • We are only a small business that would have maybe 3-4 people working together.
  • A flat is easier to later convert into residential once we outgrow the space.
  • Once we outgrow the office if that happens and we need to move into a bigger property, I can use the property for residential purposes.
  • Residential property is a more versatile asset in this respect than office space.

He wants to know if he would have a problem with claiming expenses and loan interest. I am wondering if anyone has been in a similar situation because it seems there must be more difficulties in the way of a scheme such as this

Replies (10)

Please login or register to join the discussion.

Lone Wolf
By Lone_Wolf
16th Jan 2020 12:04

If it is genuinely being used as an office as he says then I see no problems.

Will he be advising the local authorities that a business will be run from the flat? There may be restrictions, or rates to pay in order to do so.

Failing to declare it as such may make the idea that it's an office seem suspect to HMRC.

Thanks (1)
Caroline
By accountantccole
16th Jan 2020 12:11

Has he checked Hungarian tax implications?

Thanks (1)
avatar
By Tax Dragon
16th Jan 2020 12:48

I like the idea of setting up a permanent establishment overseas for my suppliers to use.

Thanks (1)
Replying to Tax Dragon:
avatar
By Wanderer
16th Jan 2020 13:12

Good point, raises the question are these freelancers or employees?

Thanks (1)
Replying to Wanderer:
ALISK
By atleastisoundknowledgable...
16th Jan 2020 16:13

Wanderer wrote:

Good point, raises the question are these freelancers or employees?

Neither - they’re in that ‘permalancer’ category that most of my clients seem to use. Including a bar that had 2 e’ees (GM & chef) and 30 s/e individuals ... it gets better ... ... ... paid cash from the takings.

Actually had a client mansplain the term to me in an email once.

Thanks (1)
Replying to atleastisoundknowledgable...:
avatar
By Wanderer
16th Jan 2020 16:17

So employees then.

Thanks (0)
Replying to Wanderer:
ALISK
By atleastisoundknowledgable...
16th Jan 2020 16:38

Wanderer wrote:

So employees then.


Shhhhh.

But yes.

Thanks (0)
avatar
By JenniferHM
23rd Jan 2020 12:42

There's also an option for a property investment that includes property management https://helpers.hu/services/invest-in-hungary/property-investment/. There shouldn't be any issues with taxes, they are calculated depending on whether you buy as an individual or as a Hungarian (holding) company owner.

Thanks (0)
Red Leader
By Red Leader
23rd Jan 2020 14:36

Are you certain nobody will be sleeping there overnight?

Thanks (0)
avatar
By JenniferHM
31st Jan 2020 14:27

Well, there shouldn't be any issues if you entrust property management to genuine pros. Aside from managing your property, these people also provide comprehensive payroll administration services for your employees https://helpersfinance.hu/services/payroll/, in addition to accounting and tax advisory.

Thanks (0)
Share this content

Related posts