Some of our clients are convinced that if they transfer to another country it would be wise to purchase an apartment or house in the region of their new club instead of paying rent. They consider the rent as “wasted” money while a purchase could have a return (also when they leave the country) and is therefore not “wasted”.
First of all, the investment decision as such should be analysed. Is it easy to rent the apartment or house? How much would be the rent? What are the costs for the owner? What is the cost of the purchase?
If after such analysis it still seems wise to invest, it should also be taken into account that real estate in another country can have tax consequences. To start with, in principle everyone has to pay taxes on all the real estate they own, including real estate abroad. The declaration in the homeland must specify that this building was acquired abroad. Don’t forget to do this. Anyway, most countries exchange information in this field. And there’s more: often an additional tax return needs to be submitted (and taxes paid) in the country where the real estate is located. We advise footballers to appoint someone (e.g. an accountant or a tax specialist) to do this for them but of course this also implies costs.
Knowing how the footballer bought the real estate is important too. All too often we come across everything but transparent constructions whereby the real estate was purchased through a (foreign) company. Even if this is perfectly fine in a legal sense, these constructions should best be analysed in terms of desirability. Because the more complicated the construction, the more work for the accountant (and the tax specialist, the lawyer and any other experts that have to be involved in this) to process all this correctly in accounting and tax terms. And the more work, the higher the invoice for the owner…
In short, it is important to talk to your accountant and other advisers about the desirability of buying real estate in another country. You must also take into account the annual costs to correctly process the real estate and the possible foreign construction in tax and accounting terms.
In our book The Bankrupt Footballer – 50 guidelines to take control over the business side of your football career, we explain in further detail the investment in real estate.