THE INVESTMENT FOR YOUR FUTURE.
Is buying an owner-occupied apartment a sensible investment despite rising interest rates? The only answer to that question is “yes”. A property in a good location has a stable value and, unlike equities for example, is not susceptible to inflation risks. Similarly, the demand for housing remains high in major conurbations, which is impacting rent prices.
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STABLE PERFORMANCE
Properties in sought-after locations have a proven history of stable performance over the years. The constantly growing demand for residential space is having a positive impact on the value of real estate.
INFLATION PROTECTION
Real estate is a proven hedge against inflation, as its values and rental income typically increase with inflation. It thus offers investors an effective way to protect their assets against depreciation.
TAX ADVANTAGES
Real estate offers investors tax advantages through depreciation and the deductibility of costs such as interest and renovations. These incentives make real estate a popular choice for investors seeking long-term returns and tax advantages.
LOW RISKS
Real estate is considered to be a comparatively low-risk form of investment due to its long-term stability and potential capital appreciation. Its physical nature and constant demand make it a reliable investment with lower market volatility compared to other investments (such as equities).
LONG-TERM INVESTMENTS
Real estate is a popular choice for long-term investments as it offers stable returns and potential appreciation over an extended period of time. The long-term demand for residential and commercial real estate makes it a reliable investment option for investors seeking long-term growth.
QUALITY PAYS OFF
Investments in high-quality real estate can pay off in the long term. By selecting properties in good locations and with solid structures, investors can achieve stable rental income and long-term capital appreciation. Quality is therefore a decisive factor in the long-term success of real estate investments.
GRADUAL DEPRECIATION FOR WEAR AND TEAR
Following the enactment of the new Growth Opportunities Act, it is now possible to apply a gradual depreciation rate of 5% for new construction projects. This allows you to depreciate your new-build property for tax purposes more than has been the case to date. You benefit here as you can reduce your investment costs faster and increase your return on equity.
What’s behind this?
If you buy an apartment, you can claim the building share of your investment costs in your tax return in the first year. In the following years, you depreciate it at a rate of (5%) of the corresponding residual book value.
DISAGIO (DISCOUNTS) – PAY YOUR INTEREST IN ADVANCE
Simply put, a “disagio” (discount) is an advance payment of interest to your lender, who withholds it immediately. This will reduce the monthly payment by lowering the nominal interest rate on your loan. This may be of interest to you if you buy your property as an investment, as you can deduct the amount from tax if the apartment or commercial space is rented out or used commercially.
This information does not constitute investment advice and therefore is not a recommendation to buy or purchase an owner-occupied property and it does not represent any other financial or investment advice. The documents/information provided here are for information purposes only and are no substitute for an individual consultation. All information subject to change. As at: 28.08.2024
