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I'm an IT contractor in the UK, I'm considering buying a flat in Poland, rent it on Airbnb or work remotely from there.

I'm thinking if it's worth buying it through LTD company in my case. Would it be more tax efficient to buy it in cash or take a mortgage?

There is a lot of articles about buying through LTD company, but most of them are considering mortgage and buying in the UK only.

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Cash rules. You will get a better deal, you can haggle to get a lower price. Atleast in UK, but not sure how it works in Poland.

rent it on Airbnb

This might be a simple option, but income generated on Airbnb will be classified as company income and will be taxable.

work remotely from there.

This will be a complicated operation and my advise ( and if you have an accountant ) will be to stay away from it. This will be classified as benefits under UK tax regulations and you will need to pay class 1 NIC. So not worth it.

And getting a mortgage for a LTD company in UK, you will only get a Buy you Let mortgage whose purpose is primarily to recycle your rising equity (ideal condition) in the house by remortgaging. In UK because of restricted house supply this is ideal, not sure if it the case in Poland. Secondly you might ask Polish lenders too. I think it will be simpler if you do it through a Polish entity rather than an UK entity. But doing this is going to complicate your LTD company tax matters, so think before you leap into it.

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Why buy through British agency when you can use Polish one with lower rates (because their profit is in zlotys and not pounds and LTD company will bil you for all the things mentioned below)

Taking a mortgage in Britain and buying in Poland may be troublesome as this will be extra cost of evaluation and pricing between British bank and polish appraiser (who would probably need to translate all documents with sworn translator).
It is always better to buy with own money rather than mortgage because you don't pay bank cost. Also some banks forbid to earn money on bought property for a set period of time which could be troublesome if you want to rent it out.
And third is that you don't need any special permit to buy a flat in Poland (You would have large problems with house as Poland have strict land laws).

  • "It is always better to buy with own money rather than mortgage because you don't pay bank cost. Also some banks forbid to earn money on bought property for a set period of time which could be troublesome if you want to rent it out." The loan out exception, basically exist if you get private subventions. As a enterprise you will always profit from your property. The mortgage is often better as a company since you can write off your investment over a longer time span, and those tax reductions are better then the 2% interest you pay today. You might even argue to take a higher mortage to invest – chris Oct 1 '18 at 12:54
  • Yes, if you are an enterprise it's better to have large cost so you can save in other places (for example tax). But a person may not have such ability (for example rates can be tax deductibles but bank costs not) – SZCZERZO KŁY Oct 1 '18 at 13:39
  • But if i understand the thread opener cprrectly he has a enterprise and wants to buy himself an enterprise building for living and working. The lower tax will raise the profit of his enterprise in this case, and make a mortgage intresting. Also property has very low interest rates, especially when buying/building so if you use cash reserves there but you could use working money (maybe even later) a mortage could be cheaper. Many enterprises need cash reserves or credit, because they are paid when they finished work (and both sides agree) and that can took a while. – chris Oct 1 '18 at 14:50
  • That would require far too much legal hoops than it would be worth it. Basically he would need to register a branch in Poland and pay taxes in Poland for the whole year of activity, then choose when he pays final taxes and settle it there (which would require trying to get paid tax in Poland) – SZCZERZO KŁY Oct 1 '18 at 15:09
  • Most likely he need to pay taxes in poland anyway, and depending on the amount he saves it might worth it. Remind a house easily can cost a million, and you might pay around to 40% taxes. But i wouldnt trust the Internet about it and ask a pro who gets all the necessary data. (And wait how he can work in UK in future from the EU) It is a complex case, with potential to earn a huge amount in few days work. Probadly He stays in UK or will transfer his company to poland if he hadnt employees. – chris Oct 1 '18 at 15:44
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You can usually write a mortage off as a buisiness, if you buy it you have a more limited time span to pay it off.

Buying a flat where you live and work from a uk ltd(mostly non eu if you life there more then 6 month), and pay taxes in poland (at least when you work half the year+ from there). When you live there privately, you mostly doesn't get the tax advantages as airbnb tourist flat, you most likely add a realistic loan to your taxable income. As airbnb flat, it is something different but remember you often needs a license especially when you use it as the buisiness as a private person you are mostly in a better position for this. Working through the borders, might add some taxes too in future. It isn't so easy to convince a polnish bank to give a mortage to a uk enterprise with limited securyties and again brexit. (usually you open an polnish enterprise for this, or get an mortage for an flat/house in england to pay off the new one in a different country with interest rates like you buy a new house/flat)

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