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Old 25.08.2016, 11:32
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Buying a car Vs car leasing on the taxes profile

Dear all,

i found a number of threads were it is discussed that owning a car is part of the one's wealth and therefore accounts for the wealth taxes.

I could not find an argumentation that compares leasing a car Vs buying a car under the tax declaration profiles and under the money management profile. maybe the taxation forum is not the most adequate, or maybe it is.

if I understand correctly:
- if I own the car, the presumed car value will contribute to my wealth tax, and this will impact my taxes in which percentage?
- if I lease the car, I will pay interests on rates, I will not declare the car in the tax declaration until I will pay the last rate and I decide to buy actually the car. At that moment in time the car is depreciated to a certain fraction of its original value, and it should impact the taxes for that value..

So, I am looking for arguments on buying Vs lease a car as a private person under the taxation/money management point of view..

Thanks in advance for your thoughts..

Edo
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Old 25.08.2016, 11:53
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Re: Buying a car Vs car leasing on the taxes profile

Before you buy you have X ammount of money as wealth.
After you buy the car you have X-C ammount of money and a car worth C.

Makes a total wealth of what?

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Old 25.08.2016, 12:10
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Re: Buying a car Vs car leasing on the taxes profile

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Before you buy you have X ammount of money as wealth.
After you buy the car you have X-C ammount of money and a car worth C.

Makes a total wealth of what?

Not counting depreciation

Choosing to pay cash or lease a car should not be based on the amount of tax you'll pay on the assets.
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Old 25.08.2016, 12:23
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Re: Buying a car Vs car leasing on the taxes profile

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Not counting depreciation



Choosing to pay cash or lease a car should not be based on the amount of tax you'll pay on the assets.


The difference will be less than a tank of fuel, probably considerably less than a tank of fuel.
Tax tip, fill your car with petrol on 31 December ......
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Old 25.08.2016, 13:29
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Re: Buying a car Vs car leasing on the taxes profile

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- if I own the car, the presumed car value will contribute to my wealth tax, and this will impact my taxes in which percentage?
This wealth tax is miniscule, about 0 - 0.3% (and you need to be *very* rich to reach the high bound). Service and maintenance costs will easily be a factor of magnitude more. If you can afford the car, you can afford to pay this tax. Furthermore you can write 40% off of car's taxable value every year, so it'll diminish quite fast.

Quote:
- if I lease the car, I will pay interests on rates, I will not declare the car in the tax declaration until I will pay the last rate and I decide to buy actually the car.
You can deduct leasing interest from your income tax - now that could be a sizeable chunk of money. But you're not going to save any money after taxes anyway, I'd view this deduction as merely a sort of a discount on the leasing rate.
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Old 25.08.2016, 13:41
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Re: Buying a car Vs car leasing on the taxes profile

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This wealth tax is miniscule, about 0 - 0.3% (and you need to be *very* rich to reach the high bound). Service and maintenance costs will easily be a factor of magnitude more. If you can afford the car, you can afford to pay this tax. Furthermore you can write 40% off of car's taxable value every year, so it'll diminish quite fast.


You can deduct leasing interest from your income tax - now that could be a sizeable chunk of money. But you're not going to save any money after taxes anyway, I'd view this deduction as merely a sort of a discount on the leasing rate.
Are you sure you can deduct the interest from leasing? I have always been told it is specifically excluded from deductible expenses, whereas if you take out a loan the loan interest can be deducted.
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Old 25.08.2016, 13:48
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Re: Buying a car Vs car leasing on the taxes profile

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Are you sure you can deduct the interest from leasing? I have always been told it is specifically excluded from deductible expenses, whereas if you take out a loan the loan interest can be deducted.
yeah, sorry, you're right. you can deduct if you take the loan instead of leasing
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