Capital Gains Tax on Real Estate

Information about capital gains tax on property sales in Belgium...

In simple terms, a capital gain on the sale of property is the difference between the original purchase price and the eventual sale price.

In general, individuals who sell real estate that has never been used as their primary dwelling are taxed on the capital gain if the sale occurs less than five years after the acquisition. In this case, the tax rate is 16.5 percent. Local tax is paid in addition to this, making the total approximately 18 percent.

Individuals realising a capital gain on the sale of a plot of land are, in principle, taxable on the capital gain at 33 percent if the sale occurs within five years after the acquisition and at 16.5 percent if the sale occurs between five and eight years after the acquisition. Local tax is paid in addition to this, making the total approximately 35 percent or 18 percent respectively.

In addition, individuals who do not carry out a real estate business, but who actively buy and sell Belgian real estate, can be taxed on the capital gains in the "miscellaneous income" category, regardless of the holding period of the real estate. In this case, the tax rate is 33 percent (plus local tax).

Individuals who have amortised real estate (i.e. a property for which they are paying off a loan and interest), and which they use for business purposes, are also taxed on the capital gain upon transfer of this real estate.

Belgian or foreign corporations that hold property in Belgium are always taxed on the capital gain upon the transfer of Belgian real estate. The tax rate amounts to 33.99 percent.

Disclaimer: Tax law is complex, and every effort has been made to offer information that is current, correct and clearly expressed. The information in this summary is intended to be no more than a general overview of the position, and certain details have been deliberately omitted. The contents of this page should not be taken as an authoritative statement of Belgian tax law and practice. Neither the author nor the publisher are responsible for the results of actions taken on the basis of information contained in this summary, nor for any errors or omissions. This text is not intended to render legal, accounting or tax advice. Readers are encouraged to seek professional advice concerning specific matters before making any decision.

Prepared by Marie-Lise Swinne, SA Tax Consult NV Avenue du Dirigeable-Luchtschiplaan 8, 1170 Watermael-Boitsfort, Brussels Tel: 02 678 17 82, Fax: 02 675 38 88, www.taxconsult.be