Belgium Flag

Belgium: Overview

Last Updated: Jun 25, 2008

Housing market cooling in Belgium

After several years of rapid price increases, Belgium’s housing market has slowed due to tighter credit conditions. The average price of dwellings in Belgium rose by a mere 5.7% (2.5% in real terms) in 2007. In 2006, dwelling prices rose 13.2% (10.9% in real terms), and in 2005 prices rose 29.6% (26% in real terms).

Significant slowdowns also took place for apartments and villas. The average price of apartments rose by a mere 4.8% (1.7% in real terms) in 2007, down from impressive increases of 14.7% (12.5%) in 2004, 12% (9%) in 2005 and 11% (8.7%) in 2006.

Belgium has experienced 20 years of house price rises, partly due to strong economic growth, but mostly due to the long period of low interest rates.

Between 2000 and 2007, the average price of Belgian houses rose by 97% (70% in real terms), while apartment prices rose by 84% (59% when adjusted for inflation).

There are no restrictions on foreigners buying property in Belgium. However, roundtrip transactions costs are generally high. Tenancy laws are also biased against landlords – and finally, rental income taxes are moderate to high.

Read Price History  »

RENTAL YIELDS

Last Updated: May 18, 2009

Belgium remains static at 5.5%

Gross rental yields in Brussels, Belgium are around 5.5%, almost unchanged from last year (5.3%).

An upper-end apartment in central Brussels would cost €2,651 per square metre (sq. m.), according to the Global Property Guide, almost unchanged from €2,514 per sq. m. last year.

The index of apartment prices across Belgium rose 6.26% in 2008, according to the Institut National de Statistique, or 1.73% after inflation.

Read Rental Yields  »

TAXES AND COSTS

Last Updated: Aug 26, 2008

Moderate to high
effective income taxes in Belgium

Rental Income: Personal income tax rates range from 25% to 50%, depending on the taxable net income. The taxable net income is the cadastral value, increased by 40%, minus deductible expenses. As a result, the effective rental income tax is a bit lower than the headline rate, ranging from 12% to 21%.

Capital Gains: Capital gains tax of 16.5% is payable on gains on developed property held for less than five years. After a holding period of five years, no Capital Gains Tax is payable.

Inheritance: Inheritance tax rates in Belgium are progressive and vary according to the degree of kinship, region where the inheritance is opened, and the share inherited by each of the heirs.

Residents: Residents are taxed on worldwide income, at the rates previously mentioned.

Read Taxes and Costs  »

BUYING GUIDE

Last Updated: Mar 06, 2007

Total transaction costs are high in Belgium

Closing costs are high in Belgium, between 13.9% and 22.1% of property value. The bulk of the cost is accounted for by transfer duties, at 12.5% or 10%, depending on the property’s location. Roundtrip costs for new properties are much higher because of the 21% VAT.

Read Buying Guide  »

LANDLORD AND TENANT

Last Updated: May 30, 2006

Tenant protection laws are well-established in Belgium

Belgian law is pro-tenant.

Rents: Rents can be freely negotiated but rent increases above the inflation rate cannot be written into the contract. If there is a written contract, the rent will be automatically adapted once a year in accordance with the cost of living. Deposit payments must not exceed three month’s rent.

Tenant Security: Belgium’s landlord and tenant law is restrictive as regards the length of rental contracts. The main options for the duration of a lease are: a contract of 9 years and, alternatively, a contract for less than three years.

Read Landlord and Tenant  »

ECONOMIC GROWTH

Last Updated: Jun 25, 2008

Weaker economic growth

Belgium is a small developed country in Western Europe, with a GDP per capita of US$42,560 and a population of 10.4 million. Its capital, Brussels, is home to several international organizations, including the headquarters of the European Union and the North Atlantic Treaty Organization.

In 2007, Belgium’s GDP growth rate was 2.8%. Belgium’s economy expanded by an average of 2.6% between 2004 and 2006, higher than the average of 1.05% GDP growth from 2001 to 2003. Real private sector wages rose by 3.8% in 2007, and 3.2% in 2006. The unemployment rate was 7.5% in 2007, down from 8.2% in 2006 and 8.5% in 2005.

The economy is expected to expand by only 1.7% in 2008 and 1.5% in 2009. Real wages are expected to rise by 3.5% in 2008.

Inflation fell to 1.8% in 2007, from 2.3% in 2006 and 2.5% in 2005. Inflation is expected to rise to 3.6% in 2008.

 

  • Strong demand for rental units
  • Moderate to high transaction costs
  • Tiresome tenancy length limits
  • Moderate to high taxes

RESIDENTIAL PROPERTY FACTS
Price (sq.m): €2,465 For a 120 sq. m. property, usually an apartment. Rental Yield: 5.78% For a 120 sq. m. property, usually an apartment.
Rent/month: €1,424 For a 120 sq. m. property. Income Tax: 12.06% Assumptions: Owners are a non-resident couple drawing US$ / €1,500 per month in rent, with no other local income.
Roundtrip Cost: 17.9% The total cost of buying and then reselling an apartment. Includes:

* all transaction taxes and charges:
* lawyers' and notaries' fees
* agents' fees

Assumptions: The buyers are non-resident foreigners. The apartment cost US$250,00 / €250,000.
Cap Gains Tax: 0.0 Assumptions: The property was bought for US$250,000 / €250,000, and sold 10 years later, after a 100% appreciation.
Landlord & Tenant Law: Pro-Tenant Rating is based on a detailed study of each country’s law and practice.

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