While ordinary citizens struggle to pay their mortgage or rent, large housing holders use a textbook tax trick: deducting all expenses from their properties. From homeowners' association fees to bathroom renovations, everything passes through the tax authorities as a deductible expense. The result is a reduced tax bill, while the small property owner can barely scrape together a euro on their tax return. The law is designed so that those who have the most pay the least. 😤
The tax savings algorithm: how SOCIMIs dodge the taxman 💰
SOCIMIs and large investment funds have perfected a tax optimization system that borders on financial engineering. Through the figure of residential leasing, they deduct homeowners' association fees, property tax, insurance, repairs, and even default insurance. On the balance sheet, profit is artificially reduced. The result is an effective tax rate that can fall below 5% of gross income. Meanwhile, a self-employed person renting out an apartment pays up to 50% of their actual profit.
The sweet deal of deducting even the real estate agent's coffee ☕
According to the logic of these large holders, even the coffee the manager drinks while reviewing the breakdown report is a deductible expense. And watch out, if the washing machine breaks down every two months, even better: more expenses, less tax. It's almost as if they want everything to break down so they pay less. If we applied the same logic at home, we would deduct even Saturday's pizza as a tenant maintenance expense. But no, that only works if you have two hundred properties and a good tax advisor.