A frequently asked question among new entrepreneurs:
“Can I rent out something I own privately, such as my home or car, to my sole proprietor business?”
In this article, we provide a clear answer to this question and show you which expenses you are allowed to claim in a sole proprietor business.
Renting from yourself as a sole proprietor? Not allowed
The short answer: no, you cannot charge rent to your own sole proprietor business for something you own privately.
Why not? Because, legally speaking, you and your sole proprietor business are one and the same person. So you would effectively be renting something (through your business) that you already own (as a private individual).
But given that you, as a sole proprietor, and you, as a private individual, are essentially one and the same person, it simply isn’t possible. You cannot, therefore, rent anything from yourself.
An example
You bought a car privately before you started working as a self-employed person. Now you use that car partly for your business.
➡️ You may not charge rent to your sole proprietor business for the use of that car.
Tip from an accountant
‘What you can do is sell your car to your sole proprietor business. I would advise against doing this with your home.’
What can you claim as an expense then?
Although you cannot charge rent to yourself, there are definitely deductible expenses available, provided you can justify them as business-related, of course. A few examples:
- 📊 Mortgage interest (partially, if used for business purposes)
- 💡 Energy and water costs (depending on business use)
- 🧾 Fire insurance (partially for home working)
- 🚗 Car costs (based on actual costs and, of course, where there is actual business use)
⚠️ Please note: business use must be demonstrable, e.g. via the square metres of a home office.
Would you like to know more about claiming expenses for your start-up as a self-employed person?
What if you operate as a company?
The situation is different for a company. The company is a separate legal entity, and in that case it is possible to charge rent for your home or for materials that you own privately but make available to the company. You own something privately and provide it for rental purposes to your own company, but that company is not you yourself.
This is not possible for sole proprietors. Does that mean you have to stop your sole proprietor business? No, certainly not. Renting to your company is a nice tax optimisation, but nothing more than that.
View the video for more information on renting from yourself
In this video, the question about renting from yourself as a sole proprietor has been answered using examples and tax explanations.
Conclusion
Renting from yourself as a sole proprietor:
- ❌ Not permitted for sole proprietors
- ✅ Possible in a company
- 📌 Relevant costs can be claimed, provided they are for legitimate use and supported by evidence
Want to be sure which costs you can claim as a self-employed person in Flanders? Take a look at theDexxter learning center or ask your question in our community.
