Belgium Property Tax Guide

Cadastral Income (KI/RC — Kadastraal Inkomen / Revenu Cadastral)

• Definition: The cadastral income (kadastraal inkomen / revenu cadastral — KI/RC) is the deemed annual rental value of a property as assessed by the Algemene Administratie van de Patrimoniumdocumentatie (AAPD / Documentation Patrimoniale) — the Belgian Land Registry. The KI was originally set based on 1975 rental values and is indexed annually to the health index. The KI is the basis for both the onroerende voorheffing (property tax) and the taxation of rental income in the personal income tax.
• Indexation: The KI is increased annually by the index coefficient, which is published each year by the FOD Financiën. For 2026, the index coefficient for the onroerende voorheffing is approximately 2.23 (the KI × 2.23). The coefficient for rental income taxation in the personal tax return is a separate but similar index.
• Appeal and revision: The KI can be appealed if it is clearly incorrect (e.g., if the property's actual condition differs significantly from the assessment). The appeal must be filed within 6 months of the property transfer or new construction. The KI is revised (herziening / révision) when the property is transferred or undergoes significant renovation (the "herziening bij overdracht" — revision upon transfer).

Onroerende Voorheffing (Property Tax / Précompte Immobilier)

• Regional rates: The onroerende voorheffing (OV / précompte immobilier — PI) is an annual tax levied on the owner of a property. The base rate is set by the region where the property is located: Flanders: 3.97% of the indexed KI; Wallonia: 3.97% (as of 2026); Brussels-Capital: 4.05%. These rates apply to the indexed KI (the "basisbelasting" / "impôt de base").
• Provincial surcharge (Opcentiemen provincie / Additionnels provinciaux): Each province adds a surcharge to the base rate. The provincial surcharge is a percentage of the base tax. Typical provincial surcharges vary from 200% to 500% of the base rate — meaning the effective property tax is 3–6 times the base amount. In practice: (a) Flanders: base 3.97% × indexed KI × (1 + provincial surcharge percentage + municipal surcharge percentage). A typical combined rate is approximately 0.08–0.20% of the property's real market value (the government is currently reforming the system to better reflect market values, the "herwaardering van het KI" which was planned but delayed).
• Municipal surcharge (Gemeentelijke opcentiemen / Additionnels communaux): Each municipality adds a further surcharge. Municipal surcharges range from approximately 500% to 1,200% of the base rate. The total combined rate (region + province + municipality) is typically expressed as a total "percentage" of the indexed KI — e.g., in a typical Flemish municipality, the total rate might be 3.97% × (1 + 200% prov + 800% mun) = 3.97% × 11 = 43.67% of the indexed KI.

Registration Duties (Registratierechten / Droits d'Enregistrement)

• Flanders: (a) Standard rate: 12% of the property's fair market value for most purchases (existing homes, investment properties). (b) Reduced rate — own home (meeneembare registratierechten): Since 1 January 2025, only 3% registration duty applies to the purchase of your own primary residence (the "meeneembaar" — portable registration duties). This is a landmark reform. The reduced rate applies to all purchasers of their primary residence (not just first-time buyers). The reduced rate is portable — if you sell your home and buy a new one within 2 years, you can transfer the remaining registration duty credit to the new purchase. (c) First-time buyer exemption: First-time buyers of a primary residence under €600,000 (the "meeneembare" regime) pay 3% with no additional incentives. (d) Renovation requirement: For purchases at 3% rate, the buyer must certify that the home will be occupied as a primary residence and must complete certain renovation works within 5 years (the "renovatieverplichting" — mandatory renovation for older homes).
• Wallonia: (a) Standard rate: 12% of the property's fair market value. (b) Reduced rate — first home: 6% registration duty on the first €500,000 of the purchase price for first-time buyers of a primary residence (the "abattement" — exemption). The 6% rate applies to the first €500K; the excess above €500K is taxed at 12%. (c) Conditions: The buyer must occupy the property as a primary residence for at least 5 years. The buyer must not have previously owned a home (first-time buyer).
• Brussels-Capital: (a) Standard rate: 12.5% of the property's fair market value. (b) Reduced rate — first home: 6% registration duty on the first €600,000 of the purchase price for first-time buyers of a primary residence. (c) Conditions: Same as Wallonia — 5-year primary residence requirement, first-time buyer condition. (d) Additional exemption: The registration duty base includes the value of the building only (not the land) for certain new buildings — the "abattement" of up to €175,000 on the building value.

VAT on New Builds

• New construction (Nieuwbouw / Construction neuve): The purchase of a newly constructed building (including a house or apartment sold "off-plan" / "in aanbouw" / "en construction") is subject to 21% VAT instead of registration duties. The VAT is payable on the construction price (the building value). The land on which the building stands is still subject to registration duties (12% or reduced rate). The total cost is therefore: (land value × registration duty rate) + (building value × 21% VAT).
• Reduced VAT for social housing: Certain social housing projects (sociale woningbouw / logements sociaux) may qualify for reduced VAT rates (6% or 12%). This is typically limited to recognised social housing associations and specific projects under regional regulations.

Capital Gains on Real Estate

• Own home (Eigen woning / Résidence propre): Capital gains on the sale of an individual's primary residence are fully exempt from tax. No conditions on holding period or reinvestment. Gains on a secondary residence or rental property are generally taxable.
• Speculative gains (within 5 years): If an individual sells real estate (other than their own home) within 5 years of purchase, the gain is taxed as "speculative income" at a flat rate of 16.5% plus municipal surcharge (~17.5% effective) in Flanders. In Wallonia and Brussels, the rate may differ slightly but is generally in the 16.5–33% range depending on the specific circumstances. The gain is the difference between sale price and purchase price (plus acquisition costs, renovation costs, and selling costs).
• Professional/regular trading (Vastgoedhandel / Commerce immobilier): If the taxpayer buys and sells real estate as a regular business (a "vastgoedhandelaar" / "marchand de biens"), the gains are taxed as professional income at progressive rates (25–50% plus social security). This applies to individuals who buy, renovate, and sell properties with a profit motive. The activity must be systematic (multiple transactions within a short period). The tax authorities use specific criteria to determine professional status: frequency of transactions, use of loans, involvement of a team, marketing of properties.
• Gains on property held for 5+ years: If the property is held for more than 5 years and is not the primary residence, the capital gain is generally tax-free (for individuals) unless the gain is from professional real estate trading. This is an important difference from many other EU countries where all real estate gains are taxable.

Rental Income Taxation

• Non-furnished rentals (On gemeubileerde verhuur / Location non-meublée): The rental income from a non-furnished property is NOT directly taxed on the rent received. Instead, the indexed cadastral income (KI) + 40% flat deduction is added to the landlord's taxable income. The formula: taxable amount = indexed KI × (1 − 40%) = 60% of the indexed KI. This is a very favourable regime — the actual rent (which may be many times the KI) is ignored for tax purposes.
• Furnished rentals (Gemeubileerde verhuur / Location meublée): For furnished rentals, the actual rent received is taxable at progressive income tax rates. The landlord can deduct actual expenses (depreciation of furniture, maintenance, insurance, property management fees) OR a flat-rate deduction (40% of the rent, capped at approximately €7,000). The actual rent must be reported on the tax return. The depreciation of the furniture is based on the useful life (typically 5–10 years).
• Commercial rentals: Commercial rental income (non-furnished) is taxed in the same way as residential non-furnished rentals — based on KI + 40% deduction. However, if the property is used by the owner for their own business, the KI can be used as a "minimum" taxable basis (the "normaal rendement" / normal yield). Commercial tenants often pay "droit d'entrée" (key money / entreegelden) which may be taxable as capital gains if the tenant sublets the property.

Mortgage Interest Deduction (Woonbonus)

• Flanders (Woonbonus — phased out): The mortgage interest deduction for new mortgages taken out after 1 January 2020 in Flanders has been abolished (for mortgages for primary residences). Existing mortgages (taken out before 31 December 2019) continue to qualify for the old woonbonus — a tax credit of up to €2,280/year (for a couple). The woonbonus was replaced by the "meeneembare registratierechten" (reduced registration duties) as the primary housing incentive in Flanders.
• Wallonia (Woonbonus / Bonus logement): Wallonia still offers a mortgage interest deduction for mortgages taken out before 1 January 2024 (the woonbonus has been phased out for new mortgages from 2024). The deduction is a tax credit (not a deduction from income) — it reduces the tax due directly. The maximum credit is approximately €3,040/year for a single person (€3,760 for a couple). The credit is based on the actual interest paid and capital repayment of the mortgage.
• Brussels-Capital (Woonbonus / Bonus logement): Brussels retained the woonbonus until 31 December 2024. For new mortgages from 1 January 2025, the woonbonus has been replaced by the reduced registration duty system. Existing mortgages continue to qualify under the old rules: maximum credit of approximately €3,040/year for a single person.
• Conditions for the woonbonus (Wallonia/Brussels existing): (a) The mortgage must be for the primary residence (owner-occupied). (b) The loan must be a "social loan" (sociale lening / prêt social) meeting certain criteria (fixed interest rate, maximum LTV of 100%, minimum term of 10 years). (c) The credit is phased out for higher incomes (income > approximately €100,000 for a single person, €130,000 for a couple). (d) The credit applies to both interest AND capital repayment (the "kapitaalaflossing" component).

For related reading, see our Personal Tax Guide →, Corporate Tax Guide →, and VAT/BTW Guide →.