What must be checked taxly before a first purchase-resale transaction?

A first purchase-resale transaction may seem profitable on paper and become much less attractive once all tax parameters are integrated.

Before engaging, we must therefore reason in Net income after taxation, and not only in the margin between the purchase price and the resale price.

The quality of the operation is often at this stage.

Profitability depends on several choices made before purchase

VAT scheme, acquisition rights, qualification of activity, holding structure, financing, nature of work and method of taxation of the result can significantly alter the economy of the project.

The firm analyses these elements before signing in order to identify tax items that could reduce the margin and compare different ways of structuring the transaction.

The aim is to make the actual tax cost of the project and any margin for optimisation very early.

Test the operation before immobilizing the capital

A good tax strategy is not only about choosing a corporation or tax system.

It consists of checking whether the project remains sufficiently efficient after taking into account all the taxes that may be involved in the purchase, during the holding and during the resale.

This allows the firm to compare several scenarios, identify the points of vigilance and direct the investor towards the organisation offering the best balance between profitability, flexibility and legal certainty.

Master Edouard Pruvost specializes in consulting on real estate tax strategy and analysis of buying and selling operations. To test the tax profitability of your first transaction, compare possible structurings and benefit from tax strategy advice, contact the firm.