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Property Taxes in Belgium

What taxes to pay when buying property?



When you have decided to buy a certain property, you might be overwhelmed and forget that you still have to pay taxes. There are a few different kinds that you need to take into account.

VAT

VAT (NL: BTW FR: TVA) needs to be paid when you purchase or renovate a property. The amount of taxes depends on the type of project. If you are building a house, then the amount of VAT is 21%. For renovations, this amount can be 6% under certain circumstances.

Council tax

Depending on the region, province, city where you live, there will be extra taxes. This amount differs in every city, so it’s not possible to name them all here. It’s best to go to the city administration of your future home and ask them what additional taxes you will need to pay for garbage collection, water sanitation, radio and TV, etc.

Cadastral income

Cadastral income (NL: kadastraal inkomen FR: revenue cadastral) is the estimated net rental price that is given to a property by the Cadastral administration. This amount is calculated by taking into account the number of rooms, attics, basements, general condition of the property, etc.

If you are doing construction on your house you are obligated to inform the Cadastre of all the modifications you have done, but under normal circumstances, this will not be necessary since the city administration will already have informed them when you applied for your building permit. So you will automatically receive an application form in the mail. You can be fined if you do not report the construction with an amount of up to €13,000 and prison.

Property tax

This property tax (NL: onroerende voorheffing FR: précompte immobilier) is payable every year and should be paid by the owner of a property, not by anyone who’s renting it. The property tax is a certain percentage of the cadastral income.

Tax relief

You can get tax relief (NL: fiscale aftrek FR: déductions fiscales) in 2 ways: by tax reduction or an immediate deduction when you purchase the property. The two main ways to get tax relief are through sustainable building or your mortgage loan.

Sustainable building

The Belgian government provides a wide range of tax advantages for people who build sustainable houses or want to renovate their home and make it greener. This could be for replacing old boilers, having an energy-audit done, putting up solar panels, etc. You can get a tax reduction for up to 40% of the amount you spend on the renovations.

Mortgage loan

There are 3 categories in mortgage loans that you can get tax relief for:

  • the repayment of principal gives you the right to tax reductions;
  • a life insurance policy can also allow you to apply for tax relief;
  • in some cases you are allowed to deduct the interest on a loan from your property tax if the interest is lower than the cadastral income.

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