Isn't the OBO beautiful?

The october 20, 2020

The real estate OBO, the Owner Buy-Out, has for principle the constitution of a "sale to oneself". It is a real tool for optimizing your wealth since it allows you to reduce the tax burden on your collected rents, to keep the property in your family and to receive cash immediately.

You must first hold one or more rental properties which represent a significant part of your assets.

Several steps are necessary for the constitution of this assembly:

1) You must set up a real estate company

2) You sell your property to this civil society

3) Civil society takes out a loan to finance the purchase of your property

4) You recover the cash from the sale of your property

This operation is carried out against payment and constitutes a transfer of ownership of your property to the company.

It is necessary to meet the obligations relating to the setting up of the company:

-have the consent of the partners

- keep accounts and regular general meetings

-the company must generate income and act in the common interest of the partners in order to present a genuine corporate interest

The advantages of assembly

-the sale of your property will allow you to obtain cash that you can invest in a life insurance or capitalization contract.

- the loan being made by the company, this allows it to take charge of all the financing since it has an activity and generates profits.

-the rental of the property will allow the partners to receive additional income, generally once the property has been reimbursed.

-the transfer to the company constitutes a strategy of transmission of your family patrimony. In fact, the company's capital is made up of shares which can allow you to make successive donations to your children using the € 100,000 allowance every 15 years so as not to spend anything.

As loan interest is deductible, it reduces taxation, but it should not constitute a tax scheme for the sole purpose of evading tax. Indeed, this would lead to a requalification as an abuse of rights.

At Wealth A7 we have expertise in this area, which is why if you think this arrangement fits your project, contact us to bring your desires to life and optimize your financial situation.

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Article by : CAMILLE LESPRILLIER

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