Belgium: Taxes and Costs

Country Rating  »

Home ›  Europe ›  Belgium ›  Taxes and Costs

Moderate to high effective income taxes in Belgium

Effective Tax Rate on Rental Income
Monthly Income	€1,500	€6,000	€12,000
Tax Rate	12.1%	15.5%	21.8%
Click here to see a worked example
Source: Disclaimer

Personal Income Tax (PIT)

Non-residents renting out their property will be taxed on rental income exceeding €2,500. Rental income below the limit need not be reported in a non-resident income tax return, provided that it is the only source of income in the country.

The personal income tax rates for tax year 2008, applicable to 2007, income are:

Taxable income is based on the ‘cadastral income’, which is the property’s deemed income. This is an annual indexed value, but in practice the 1975 index is used, so that cadastral income values tend to be lower than actual rental incomes.

The cadastral value is increased by 40%, minus deductible expenses (which includes depreciation, repairs, maintenance, renovations, interest payments, as well as real estate and inheritance tax payments). The expenses relating to immovable property are computed on a flat basis depending on whether the property is built upon or not (which result in a deduction of 40% or 10%, respectively).

Depreciation for rented property is computed through the straight-line (property value – scrap value/estimated life) method. The annual depreciation rate of real estate is around 3% of the property’s investment value based on the original acquisition cost.

Property Taxes

1. Real Estate Tax (Onroerende Voorheffing/ Pre compte Immobilier): 1.25% to 2.5% of cadastral value

Tax on immovable property is levied on the cadastral value of the property at rates ranging from 1.25% to 2.5% depending on the location.

2. Municipal Tax

The municipalities may levy surcharges on the national income tax. Non-residents receiving taxable income exceeding €2,500 from Belgian immovable property must pay a municipal surtax fixed at 7%.

3. Provincial and Local Surtaxes

In addition there are provincial and local surtaxes levied on the basis of the withholding real estate tax, rather than cadastral income, which again vary depending on location.

Capital Gains Tax: None after 5 years

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.

However, if the property is sold within 2 years, the seller can claim back around 44% of the taxes and fees paid. All expenses incurred related to the property value are deductible, subject to proper documentation.

Belgium - more data and information

• Guide to buying houses and registering property sales in Belgium

Your Comments

Post a comment