UK Property Co and Buying Abroad

UK Property Co and Buying Abroad

8:14 AM, 11th July 2024, About A week ago 19

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I am considering expanding the property portfolio in my UK based Limited Company.

I currently live in Portugal and rental properties are in high demand here.

Property prices are dropping slightly at the moment and I was wondering if it would be possible for my Limited Company to purchase a property in Portugal.

The company would need to have a mortgage in order to make any possible purchase.

Does anyone know if:

1. A UK based limited company can purchase property abroad?

2. Can a limited company borrow money to make the purchase?

Thanks

Louise


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Mark Alexander - Founder of Property118

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8:20 AM, 11th July 2024, About A week ago

Hi Louise

Both of the answers to your question are yes "in principle".

However, you will need a large deposit, around 50% if you want to avoid the need for life insurance for the Directors/Shareholders to cover the mortgage.

There are plenty of banks to approach, e.g. Millenium Bank. If you are in the Lagos area I can introduce you to the Branch Director of their Premier Banking. I have lived in Lagos, Portugal for just over a year.

There are plenty of Facebook Groups for UK expats in Portugal which I have found particularly helpful.

I've asked my friends Rupert end Elena Chapman to comment on this thread and to post some links to the best Facebook Groups. They have lived here a lot longer than me and are far better connected.

I hope that helps and if you are ever in Lagos I'm happy to meet up for a coffee.

Rupert Chapman

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8:33 AM, 11th July 2024, About A week ago

Thanks Mark

If you post the question on the group linked below, I can tag specialist brokers that can help.

It may be better to get a loan in Portugal, subject to qualifying UK income. Ex pat mortgages are more expensive.

Depending on use it could be more tax efficient to own it in a personal business capacity.

For example, if you use for holiday letting you will be vat registered with opportunity of input tax expense claims.

Also this will spread your risk against potential future uk tax rule changes.

I am aware that some folk own property in Portugal via Gibraltar based ltd companies.

I dont know whether the tax efficiencies of such are currently available.

If you find out please let me know?

https://www.facebook.com/share/AXmXtX1KBT86UhzE/?mibextid=K35XfP

Mark Alexander - Founder of Property118

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8:43 AM, 11th July 2024, About A week ago

Thanks Rupert.

I think it would be far better if Louise was to Post the question herself in that Facebook group. She would then be notified by Facebook of all the answers.

I’m also interested in the answers so hopefully Louise will tag us both, and/or report any feedback here for other Property118 members that may be interested.

If I do get tagged into the Facebook thread I will link to the thread here too.

Contango

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9:44 AM, 11th July 2024, About A week ago

I would suggest that you speak to a Portuguese based Attorney who is used to acting for foreign clients.
I would suggest that the way to go is to incorporate in Portugal as a wholly owned subsidiary of the UK company so that there is a clear line in the sand as to what properties are taxable in Portugal and what in the UK.
This will also enable your UK business to pass down internal loans to the Portuguese subsidiary and give you some flexibility as to where to bear the admin expenses of operating. I could not tell you whether LLC might be better in Portugal than Ltd but quite possibly so with yourself as a nominal shareholder.
This is how we set up and got going in the US Property investment market. I have found that a locally incorporated business is treated more favourably transactionally than if the property is owned by an overseas company.

Lawrie Madden

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9:48 AM, 11th July 2024, About A week ago

I am interested in this but what happens if you have a house abroad in my case spain and have property rented in UK can or rather is it advisable to put it into a limited company
No mortgage

Contango

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9:51 AM, 11th July 2024, About A week ago

Reply to the comment left by Lawrie Madden at 11/07/2024 - 09:48
seek local advice. Possibly not worth incorporating for one property

Ryan Stevens

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10:43 AM, 11th July 2024, About A week ago

From my experience, stick to what you know best.

Having properties abroad is a pain in the neck, and, as a non-resident and non-voter, you are even more at the mercy of their political systems than you are as a landlord with one vote in the UK.

Mark Alexander - Founder of Property118

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10:47 AM, 11th July 2024, About A week ago

I can highly recommend a lawyer in Portugal who is Portuguese but also qualified as a Barrister in the UK.

She is fluent in both languages and provides superb levels of communication and services. She even translates all correspondence into both languages side by side.

Many of her clients are UK ex-pats and she also has a superb relationship with all the local banks.

Edwina Shrimpton

email: edwina.shrimpton@gmail.com

Please mention my name if you contact her.

Louise P

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11:16 AM, 11th July 2024, About A week ago

Reply to the comment left by Mark Alexander - Founder of Property118 at 11/07/2024 - 08:20
Thank you Mark. We live in Praia da Luz. My partner, who is not a director or shareholder in the company, is a premier client with Millenium Bank.
Perhaps a chat over a coffee sometime could be interesting.

Louise P

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11:20 AM, 11th July 2024, About A week ago

Reply to the comment left by Rupert Chapman at 11/07/2024 - 08:33
Hi Rupert.
I have clicked the link to the Facebook group, Thank you.
I was considering long term letting rather than holiday lets. I have many years of long term letting in the UK but its all a bit new to me over here.
Louise 🙂

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