Do you prefer to buy and resell to earn capital gains? You are still thinking about the benefits of this purchase. In this case, the profession of estate agent can certainly interest you. Accessible to all, less restrictive, tax benefits than being a real estate agent… Discover all the benefits and specialties of the profession of a property dealer!
What are the differences between a real estate agent and a real estate agent?
Even though real estate agents and property dealers operate in the same sector, they have many differences. A real estate agent is an intermediary during a real estate transaction. He represents several parties such as buyer, seller or tenant. A good trader wants to make profit only by doing buy and resell transactions.
You are considered a trader of goods when:
- You are buying with the intention of resale.
- You buy normally.
- You buy and resell buildings, land, goodwill or shares in real estate companies.
There are also no specific rules when one is a property trader. Thus it is not necessary to have specific equipment or work room. Property trader can work from home.
Both these professions are also distinguished by their study. It is very difficult and unusual to become a real estate agent without a diploma, whereas a property dealer does not require one.
Which degree to become a property dealer?
There is no degree or specific qualification required to become a property trader. This is a road open to all. However, you should be aware of the risks it can induced, the amounts involved may be substantial. Before you begin, you need to ask yourself the right questions and be well informed.
If you want to become a property dealer, don’t hesitate to learn about the real estate market, the rules and laws of this market (especially town planning laws). You can find this information in books, on the Internet, or by taking online courses. All this knowledge will also allow you to refine your guesses.
good to know
When you become a property dealer, you have to estimate your project, be it the total cost or the total working time. The more reliable and realistic your estimates are, the lower the risk of your project falling through.
Please note that you cannot become a property trader if you exercise any of its professions:
Which legal status to choose to become a property dealer?
Choosing your legal status can be difficult the first time. There is no recommended legal position when one wants to become a property trader. This position will depend on your expectations and needs.
However, company as SCI would not be suitable as this legal form is useful if you want to buy and rent only unfurnished. The same goes for self-employed status as this legal form excludes real estate VAT and does not guarantee the protection of personal assets.
We recommend you consider the following options instead:
SAS and SASU are often chosen by people who want to become property traders.
It is advisable to find one or more partners. This will limit your personal risks and provide you with more adequate protection. If you incur debt, it will be distributed according to the share of capital of each partner in the company. If you have to deal with debt on your own, it is up to you and can put you in a difficult position. If you can, choose convertible capital over fixed capital.
What rules must be respected for VAT?
Being a property dealer you can benefit from tax benefits. In most cases, VAT is applied to the final value of the product or service. For the property trader, VAT applies to the profit made between the purchase price and the resale price. For example, you buy land for €30,000 and then resell it for €50,000. You will have to pay VAT on the €20,000 margin, i.e. around €4,000 (VAT is usually 20%).
Notary fees also change for a property dealer. You will have to do many real estate transactions, which involve going through a notary.
These costs are estimated as follows:
- Between 7 to 8% for old housing.
- Between 2 and 3% for new housing.
To benefit from the above benefits, you should always buy with a view to resale as well. In general, you must resell your property within five years.
What are the other obligations to become a property dealer?
The property dealer undertakes commercial action and therefore has the following legal obligations:
- Register with RCS (Register of Commerce and Companies).
- Keep an account
- Prepare annual balance sheet.
- Take out professional liability insurance.
To carry out your activity, you will need to open an account with a professional bank and consider investing in tools such as invoicing software and possibly an accounting solution.
questions to ask
What is the legal status to become a property dealer?
It is advisable to approach SAS, SASU or SARL to become a property dealer.
Can one become a property trader without any contribution?
Banks will generally ask you to contribute between 15 to 25%. If you don’t want to contribute, you’ll need a pretty good file and a little bit of luck.
Is graduation necessary to become a property dealer?
No, it is not necessary to be a graduate to become a property dealer. You can train yourself very well. However, keep in mind that you need to have knowledge of the real estate market and the law.