À la suite de la loi du 14 octobre 2018 permettant la soumission à la TVA de locations immobilières à caractère professionnel, quelle est encore la place et l'utilité de la soumission à la TVA de la location-financement d'immeuble ?

Abstract

The legislator has given the opportunity, thanks to its Law of 14 October 2018, to subject real estate leases of a business nature to VAT. The question therefore arises of the usefulness of maintaining real estate leasing operations in the presence of this new VAT regime.

The nature, advantages and disadvantages of these two types of transactions, both of which seem to involve the rental of immovable property, must first be examined from all angles. Usage needs and the economic objectives pursued in the long term may give preference to the choice of one operating structure over another.

Is it better to buy directly or to build on one's own or someone else's land, with a right land or not? And how can one finance the operation, using one's own capital, through a bank loan or a lease of real estate?

In the end, is it not preferable to rent a building outright, with or without VAT on rents, possibly accompanied by an option to purchase?

It also depends on the objective sought by the parties in terms of the short-, medium- or long-term use of the asset, the interest rate on the borrowing and the collateral requested by the lender.

Account should also be taken of the firm's investment policy, its ability to raise funds from shareholders, whether or not the firm's location is definitively located, its operating structure, etc.

In most cases, and most often, a bank will not finance 100% of the purchase of a building and will require a personal equity intervention of 10% to 20%. The option taken will have fiscal and economic impacts on the company and on the return on investment of shareholders.

As we can see, many questions arise and the answers will influence the decision-making body. It is therefore necessary to map out the elements involved in the decision-making process.