Selling your real estate company, where to start? Should you use a realtor? Or an M&A advisor?
Instead, benefit from the support and perspective of a buyer: concrete experience. Know what to expect.
Do you recognize yourself in this?
↪ You are sole shareholder, or you are shareholder with a friend or some siblings or family members.
↪ You have been buying properties for many years with the cash flow of your business, as a medical doctor, lawyers, consultant, retailer, etc.
↪ It likely has been a great choice and amazing journey so far!
Now it's time to not get ripped off in the end line. What you built for so many years is well worth some help figuring out the right approach to exit.
Is this you? Read further.
After analyzing thousands of real estate companies, meeting hundreds of sellers, and purchasing dozens of such trusts, I am dedicating this experience to the service of sellers.
A personal and human approach, taking care of your interests.
Your situation is unique, so putting it into perspective matters. Having a simple yet thorough viewpoint from the buyer's perspective is invaluable.
Choose the package that suits you:
(Complete GUIDE)
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Husband and a father in my thirties, I am driven by a keen interest in the blend of real estate, building generational wealth, and, simultaneously, strategic business divestment.
Every new encounter presents an opportunity for personal growth and fosters personal advancement.
Time isn’t just money. It's invaluable and should be treasured as such.
(To not mistaken with the term REIT (Real Estate Investment Trust) as it is known in the US)
A private real estate investment trust (from Dutch or French literally a "patrimonial company"), is a Belgian company that primarily manages and/or operates real estate assets.
Originally, the company may have been established for another reason (such as a management company for a doctor, lawyer, consultant, etc.), but over time, it was used exclusively for managing real estate.
The main objective of a patrimonial company is the management of real estate, such as residential properties, commercial buildings, land parcels, and other real estate investments.
Of course, there might still be a car and other assets in the company (even an active business).
When real estate is held by a "patrimonial" company (a private real estate investment trust) and you wish to dispose of it, there are two possibilities: either sell the real estate ("asset deal") and then liquidate the company, or sell the shares ("share deal") in a single transaction.
The second option assumes that all the real estate held by the company is sold to the same buyer (or that you wish to keep one or more properties privately). What are the tax implications of these two options?
❶ Sell the real estate, that is the properties ("asset deal") and then liquidate the company (close the business)
When selling the real estate, notary fees and registration duties will be due (12% in Flanders, 12.5% in Brussels and Wallonia) by the buyer. Additionally, a capital gain will likely be realized by the company itself, which will be taxed at the corporate tax rate (25%). After the sale, only an empty company remains. If the capital gain is distributed as dividends to your private (natural person), a withholding tax will be applicable (or you can simply pay 10% by creating a liquidation reserve, followed by the liquidation of the company).
❷ Sell the shares ("share deal")
No notary intervention is required, and the transaction is completely tax-exempt in Belgium (usually fully tax-exempt).
❸ A third possibility exists if you want to dispose of the real estate but are willing to keep the company. There are two sub-scenarios:
- Sale of the real estate and reinvestment:
When the company sells the real estate, a capital gain is realized. To significantly reduce these taxes on the capital gain within the company, it is possible to reinvest in other properties, usually real estate. This means that the capital gain on the real estate is taxed over time (Article 47 CIR 1992), depending on the depreciation period of the new investment. If the sale price is reinvested, for example, in residential real estate that is rented out, the capital gain is finally spread over a period of 33 years. The conditions for spread taxation are, in summary, the following (Article 47 CIR 1992): the real estate sold must have been held by the company for at least five years (unless it is a forced sale) and the entire sale value must be reinvested in depreciable assets.
- Sale of the real estate, payment of the capital gains tax, and use of the company for other activities:
If you wish to get rid of your company, this is certainly not a solution, as it only postpones the problem into the future, where it could become larger (and more expensive).
When you decide to sell your legacy company, it's important that you can do so efficiently, with transaction security, and maximum financial return. By choosing to work with an experienced buyer, you opt for safety, understanding, and peace of mind. As a sector specialist, I have extensive experience and knowledge gained from analyzing thousands of companies and purchasing dozens. For you, this means a tailored solution, taking into account your specific needs.
Bank loans, if any, are taken over by the buyer. The current account (liability) is repaid to you when the shares are taken over. The current account (asset) is either reimbursed by you before the sale, or is deducted from the sale price. Personal guarantees are also released at that time.
A transfer is done in several stages, which we go through together in detail of course. Generally speaking, the steps are:
❶ Sending over documents and information to the prospective buyer (after signing a possible confidentiality agreement, or "NDA");
❷ First meeting, and viewing of the property or properties;
❸ The buyer sends out their offer;
❹ When the offer is accepted, the buyer sends out a letter of intent, followed by a signature thereof later on when accepted by each party;
❺ Period of analysis of the company, also called Due Diligence (assets, liabilities, history, ...) by the buyer; some buyers are still negotiating at this stage based on what they discover...;
❻ Signature of said agreement, register of shareholders, payment, and effective transfer of the company.
Everything is possible and can be done in advance, during the transfer, or afterwards, depending on your situation, the type of buyer, and what they are looking for. This is even possible, in some instances, without paying anything on your part, by creating a current account which will then be deducted from the sale price.
That's possible. But you need to consider which scenario best suits your situation. In most cases, your real estate portfolio consists of different types of assets. If you choose to sell them yourself, you will have to do so with different parties. To avoid spending a lot of energy and time without certainty of a better result, you may consider selling the shares and settling everything in one go. You will deal with a single buyer who will take over the entire company, resulting in a comprehensive solution for all your assets.
Additionally, you will pay a capital gains tax when selling the assets. Although this can be spread out under certain conditions, it doesn't solve the problem of disposing of the company and transferring your legacy to private wealth. Ultimately, taxes will still need to be paid, which is unavoidable.
In some cases, timing plays a role, which we will discuss together, but generally, it's often more advantageous not to wait to sell.
No, generally, the buyer themselves will take care of any problems or neglect.
It depends on the type of buyer and their strategy, and can be discussed during negotiations.
Feel free to send me an initial email. This remains absolutely confidential.
You can also first get in touch by phone, at the number below.
Jeremie RAEDEMAECKER
☏ 0492 897 343
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