Taxes in Europe Database v2
Income Tax Code, articles 7 to 16, 251 to 260ter and 471 to 504.
For the Flemish Region : the “Vlaamse Codex Fiscaliteit” (Flemish Tax Code) includes - among others - the provisions relating to the withholding tax on real estate in the Flemish Region.
The local surtax is a multiple of the revenue perceived by the regional authorities. Both provinces and municipalities receive surtaxes.
Flemish Region, Walloon Region and Region of Brussels-Capital.
The withholding tax on real estate is paid by the owner, occupier, emphyteutic lessee, superficiary owner or usufructuary of the taxable real estate.
The person possessing the real estate on 1 January of the assessment year pays the withholding tax for the whole year.
The cadastral income, the deemed rental income of the property in the assessment year.
Although the regional authorities can determine the tax base themselves, they still use the cadastral income as determined by the federal cadastral administration.
This cadastral income still refers to the deemed rental income of 1975. An inflation adjustment is however made. For assessment year 2015, the inflation adjustment coefficient has been set at 1.7057.
Reductions, rebates and exemptions for built real property
1. Common provisions
Is not chargeable to withholding tax on real estate income, the cadastral income of:
2. Flemish Region
Reduction for a modest dwelling
A reduction is granted for the dwelling which is, according to the population register, the main residence of the taxpayer where the non-indexed cadastral income of the taxpayer's global real estate situated in the Flemish Region does not exceed € 745. The standard rate of this reduction is 25%.
In the case of the construction of a new dwelling house or the acquisition of a newly built dwelling house, the reduction amounts to 50% during the first five years in which the withholding tax on that real estate is due. The taxpayer is not granted this increased reduction if he has received a subsidy for the construction or the acquisition of that dwelling house.
Reduction for family encumbrances is granted as a lump sum and is independent of the concept of “dependent children” used in respect of personal income tax. In order to entitle to this reduction, a child must entitle to child benefit and be part of the household in January 1st of the tax year. A disabled child counts for two.
These reductions are granted, from two children onwards, according to the following scale:
Reduction of the withholding tax on real estate income for family encumbrances - Flemish Region
Number of children taken into consideration
Total amount of the reduction (in euro)
Official notice published in the BOJ of 5 March 2015, p.15364.
These reductions apply to withholding tax on real estate due to the Region and thus have to be multiplied by the rate of the surcharges.
Indexed cadastral income: € 1,500
Surcharges: € 1,500
Dependent children: 2
Computation withholding tax on real estate due to Region: (1,500 x 0.025)-7.62 = 29.88
Computation withholding tax due to local authorities: 29.88 x 15 = 448.20
Total withholding tax: 478.08
Disability and infirmity
War invalids are granted a 20% reduction.
The reduction for disabled people (*) (other than children) is granted in a similar way as in the case of children. A family with one (not disabled) child and a disabled adult, is entitled to the tax reduction for a disabled person, which is equal to the reduction for two (not disabled) children.
(*) People suffering from a handicap of at least 66% due to one or several complaints.
The reduction for war invalids and the reduction for disabled people cannot be combined.
Rebate for unproductiveness
The rebate for unproductiveness is granted proportionally to the period of non-occupation or unproductiveness of the property. In order to entitle to this proportional rebate, the unproductiveness or non-occupation must be of not less than 90 days in the year. The rebate stops being granted as soon as the period of unproductiveness exceeds 12 months combined over the current and the previous assessment period. So, in order to entitle to the proportional rebate, the period of unproductiveness must be of not less than 90 days and not more than 12 months.
This limitation does not apply to built real property which is the object of an expropriation project, to real property with a social or cultural end and which are renovated or transformed on behalf of a public body by social housing agencies. It does not apply either where the taxpayer is unable to exercise his rights in rem because of a disaster of because of a case of force majeure.
Reduction for energy-saving buildings
Since tax year 2009, a reduction in the withholding tax on real estate has been granted in the Flemish Region to buildings with a “low” energy consumption, i.e. buildings with an energy level (E-level) not exceeding a certain upper limit.
The regulation has been changed for buildings for which the application for a “planning permission” has been introduced after 31 December 2012. The reduction now only applies for five years and the requirements as regards the authorized E-level are stricter than previously. On the contrary, the reductions in the withholding tax on real estate granted are higher.
The E-level is the level of primary energy consumption, as calculated in pursuance of the Flemish Energy Decree of 8 May 2009.
Is exempt from the withholding tax in the Flemish Region, the cadastral income of:
Moreover two new exemptions have been in force since 2003: the first is granted where premises used for commercial purposes are converted into dwelling houses; the second (which is a partial exemption) is granted in respect of renovation of houses unfit for human habitation. Both exemptions are granted for three or five years but they cannot be combined.
Another exemption has been applied since 2011. It concerns real estate considered as classified monuments, of which the long lease rights or the full ownership have been transferred by the Flemish Government to an “open monument association” (“openmonumentenvereniging/association des monuments ouverts”).
3. Walloon Region
In the Walloon Region, the rebate of withholding tax on real estate applies to only one dwelling, to be designated by the taxpayer. Only the reduction for a modest dwelling is expressed as a percentage of the cadastral income. The other reductions are lump sums, applied to the global withholding tax on real estate, i.e. provincial and local surcharges included.
A reduction is granted for the dwelling entirely occupied by the taxpayer himself where the non-indexed cadastral income of the taxpayer's global real estate located in Belgium does not exceed € 745.
The reduction for a modest dwelling is henceforth only granted where the dwelling is the taxpayer's sole dwelling. The dwelling must be the taxpayer's sole own dwelling on 1 January of the tax year.
However, to determine whether the dwelling is or not the sole dwelling, certain dwellings are not taken into consideration (other dwellings of which the owner is only bare owner, dwellings for which the taxpayer has actually granted his right in rem, dwelling which is not personally occupied because of legal or contractual obstacles, or because of the progress of building or renovation work, etc.).
To determine whether the dwelling is or not the sole dwelling, the real estate assets located in Belgium or abroad must be taken into consideration.
The standard rate of this reduction is 25%. It is not granted in respect of the part of the dwelling house that is used for the purpose of a trade or business, where that part exceeds one fourth of the cadastral income of the dwelling house.
In the case of the construction of a new dwelling house or the acquisition of a newly built dwelling house, the reduction amounts to 50% during the first five years in which the withholding tax on that real estate is due. The taxpayer is not granted this reduction if he has received a subsidy for the construction or the acquisition of that dwelling house.
This reduction is granted for each person dependent on the taxpayer, the taxpayer's spouse or legal cohabitant. The reduction amounts to € 125 per dependent person. It is doubled (€ 250) for each disabled dependent person or for the disabled spouse.
Spouses or the legal cohabitants (not disabled) do not entitle to the reduction.
Computation withholding tax on real estate due to Region: (1,500 x 1.25%) = € 18.75
Computation withholding tax due to local authorities: 30 x 18.75 = € 562.50
Rebate for dependent children: 2 x € 125 = - € 250.00
Total withholding tax: € 331.25
War invalids are granted a € 250 reduction for the dwelling they occupy as owners or tenants; a disabled taxpayer is entitled to a € 125 reduction. These reductions cannot be granted concurrently.
The rebate for unproductiveness is granted proportionally to the period of non-occupation or unproductiveness of the property. In order to entitle to this proportional rebate, the unproductiveness or non-occupation must be of not less than 180 days in the year.
The system relating to the rebate for unproductiveness is subject to more restrictive conditions as from tax year 2009.
The unproductiveness must be involuntary. The only fact that the real estate has been simultaneously put on lease and on sale by the taxpayer is not sufficient to prove the involuntariness.
The rebate or reduction for unproductiveness is now only granted for maximum 12 months.
This limitation does not apply where the taxpayer is unable to exercise his right in rem because of a disaster or a case of force majeure.
Is exempt from withholding tax in the Walloon Region, the cadastral income of:
It should also be mentioned that, certain economic sectors excepted, SME's having established their seat in the Walloon Region, can be exempted from the withholding tax (from July 1st, 2004 on), if they realize certain investment programs.
4. Region of Brussels-Capital
A reduction is granted for the dwelling entirely occupied by the taxpayer himself where the non-indexed cadastral income of the taxpayer's global real estate located in Belgium does not exceed € 745. The standard rate of this reduction, which applies to the withholding tax on the main residence, is 25%.
A 10% reduction is granted for each dependent child, provided the head of the family who claims the rebate has at least two children alive on 1 January of the year.
Subtotal: € 581.25
20% rebate for 2 dependent children: - € 116.25
Total withholding tax: € 465.00
War invalids are granted a 20% rebate and disabled people a 10% reduction for the dwelling they occupy as owners or tenants. These reductions cannot be granted concurrently.
The rebate for unproductiveness is granted proportionally to the period of non-occupation or unproductiveness of the property. In order to entitle to this proportional rebate, the unproductiveness or non-occupation must be of not less than 90 days in the year. In the Region of Brussels-Capital, this reduction is only granted under specific conditions.
Is exempt from the withholding tax in the Region of Brussels Capital, the cadastral income of goods that are part of the protected patrimony and that are neither let nor exploited.
Tax credit for real estate withholding tax
Only withholding taxes paid in respect of the taxpayer's principal private dwelling are creditable against his PIT tax liability and only where the cadastral income relating to this dwelling is included in the tax base. The tax credit is strictly limited to 12.5% of the part of the cadastral income included in the taxpayer's tax base.
Withholding tax on real estate for investments in material and equipment
“Material and equipment” means devices, engines and other facilities useful for commercial, industrial or craft enterprises, except from premises, shelters and their necessary accessories.
Where material and equipment are housed in built or unbuilt real property, the Cadastral administration fixes a separate cadastral income for those elements.
Replacement investments which led, after 01.01.1998 and before 01.01.2008, to an increase of the CI in comparison with its value on 01.01.1998: the CI (cadastral income) of material and equipment is exempt from withholding tax on real estate, BUT the exemption from withholding tax on real estate only applies to the part exceeding the CI fixed on 01.01.1998.
New or replacement investments made as from 01.01.2008: the CI (cadastral income) of material and equipment is totally exempt from withholding tax on real estate.
The CI of material and equipment is exempt from withholding tax on real estate where the CI of the assets existing on 31.12.2004 is lower than 795 euro per cadastral parcel.
The CI of material and equipment is also exempt from withholding tax on real estate for new investments acquired or constituted as new as from 01.01.2005. This exemption is total or partial depending on whether, on 31.12.2004, material and equipment had already been housed on the cadastral parcel (on which the new investments are acquired or constituted as new). In the event of an affirmative reply, the exemption only applies to the part of the CI of material and equipment of that parcel exceeding, after 01.01.2005, the CI which exists on 01.01.2005.
Finally, an other unconditional exemption from withholding tax on real estate applies to investments in material and equipment acquired or constituted as new from 01.01.2006 on.
Region of Brussels-Capital
Since 2006, a tax credit has been granted by the Region of Brussels-Capital to natural persons or legal entities liable to withholding tax on material and equipment. This tax credit is totally chargeable to the Region of Brussels-Capital.
This tax incentive for businesses is granted as a tax credit, so as to allow local entities and the urban area of Brussels (“agglomération bruxelloise/Brusselse agglomeratie”) to keep on collecting additional surtaxes on the withholding tax on real estate.
Tax base, rates and surcharges
The rate of the withholding tax on real estate income is applied to the index-linked cadastral income. For income earned in 2015, the index coefficient has been set at 1.7057.
The rate of the withholding tax on real estate income comprises the basic rate and the provincial and municipal surcharges.
The Regions are competent to determine the basic rate and the exemptions in respect of that withholding tax. The applicable rates are the following:
Rates of withholding tax on real estate
Material and equipment
reduced rates (e)
(a) The reduced rate of 1.6% applies to social dwellings owned by some Flemish or federal institutions. The scope thereof has been extended to dwellings owned by similar institutions in the European Economic Area. The reduced rate also applies to social dwellings of associations having as members public social assistance centres.
(b) The rate amounts to 2.5% multiplied by a coefficient obtained by dividing the average of the price indices of 1996 by the average of the price indices of the year preceding the year in which the income was received, which results in a rate of 1.77 for income earned in 2015. The application of this coefficient cannot give rise to a higher rate than the rate applicable the previous tax year.
(c) In the Walloon Region, the reduced 0.8% rate in respect of houses belonging to the SRWR (a regional housing board) or to companies recognized by it, has also been applied since 2004 to houses belonging to the FLFNW (a cooperative housing company with limited liability). This rate now also applies to dwellings leased or managed by a real estate manager in conformity with the Walloon Housing Code (e.g. by a social real estate agency).
(d) The 1.25% rate applies to the cadastral income indexed until 2002. The indexation has been frozen since 01.01.2003.
(e) As from tax year 2010, a reduced rate temporarily applies to real estate renewed in order to convert it into a passive house. The rate amounts to 0.25% for the first tax year following the year during which it is established that the dwelling is a passive house. For the second, third and fourth tax years, the reduced rate amounts respectively to 0.5%, 0.75% and 1%. As from the fifth tax year, the normal rate of 1.25% applies again.
(f) This reduced rate of 0.8% also applies to the building (of part of the building) put on lease by social real estate agencies located in the Brussels-Capital Region.
(g) The 1.25% rate is multiplied by a coefficient obtained by dividing the average of the price indices of 2004 by the average of the price indices of the year preceding the tax year, which results in a rate of 1.02 for income earned in 2015. This amounts to freezing indexation as from 01.01.2005.
All these rates are to be increased by the provincial and municipal surcharges. If the basic rate is 1.25%, for instance, then a surcharge of 3,000 centimes will generate an additional rate of 37.5%, the total rate of the withholding tax on real estate thus amounting to 38.75%.
In 2014, the average rate of the withholding tax on real estate including provincial and municipal surcharges was:
Yearly payment. The assessment of both tax and local surtax are usually sent to the taxpayer in the second half of the year. The tax and the surtax have to be paid within 2 months.
The withholding tax on real estate is not levied in the same way in the different Regions.
Since 1999, the withholding tax on real estate has been levied by the Flemish Region itself.
As far as the Walloon Region and the Region of Brussels-Capital are concerned, the tax is still levied by the Federal State.