Purchasing or selling a property in Belgium involves various taxes and fees, which can be divided into two main categories:
- Taxes related to the transfer of ownership of a property (such as transfer tax and registration fees)
- Taxes related to the ownership of a property (such as property tax, CGT, inheritance tax, gift tax, and tax on property income).
Property Transfer Taxes and Fees
- Transfer Tax: When purchasing a property in Belgium, the buyer is responsible for paying transfer tax. The rate of transfer tax is usually 7% for residential properties, but can vary based on the region.
- Registration Fees: In addition to transfer tax, the buyer must also pay for the registration of the property in the Land Register. The registration fee varies depending on the value of the property.
- Property Tax: Property tax in Belgium is based on the cadastral value of a property, which is determined by the government and represents the estimated market value of the property. The rate of property tax varies depending on the municipality, but typically ranges from 0.7% to 1.2%.
- Capital Gains Tax (CGT): When selling a property in Belgium, the seller must pay CGT on the profit made from the sale. The rate of CGT depends on the length of time the property was held, but typically ranges from 25% to 33%.
- Inheritance Tax: Inheritance tax is levied on the transfer of ownership of a property through inheritance. The rate of inheritance tax in Belgium varies depending on the relationship between the deceased and the inheritor, but ranges from 5% to 40%.
- Gift Tax: Gift tax is levied on the transfer of ownership of a property as a gift. The rate of gift tax in Belgium varies depending on the relationship between the giver and the recipient, but ranges from 5% to 40%.
- Tax on Property Income: If the property is rented out, the owner must pay tax on the rental income received. The rate of tax on property income depends on the owner’s personal tax rate.
Tax Advantages in Buying a House in Belgium
- Reduced Property Tax: In some regions of Belgium, first-time home buyers are eligible for a reduced rate of property tax for a certain period of time.
- Deductible Mortgage Interest: The interest on a mortgage taken out to purchase a property can be deducted from taxable income.
- Deductible Property Expenses: Expenses related to the property, such as repairs and maintenance, can be deducted from taxable income.
For up-to-date information on taxes and fees involved in house purchasing/selling in Belgium, you can consult the Federal Public Service Finance website (https://finances.belgium.be/en).