Published on and written by Cyril Jarnias
Moving to Belgium as an expatriate, purchasing a property there, or simply maintaining real estate while living abroad means entering a tax system that is both comprehensive and sometimes confusing. Between progressive income tax, municipal surtaxes, the property tax (précompte immobilier), and new rules on financial capital gains, it’s easy to get lost.
This article provides a practical guide to income tax and property tax for expatriates, based on current Belgian legislation and ongoing reform projects. It aims to offer clear and precise reference points, avoiding technical jargon, while presenting applicable tax figures and mechanisms.
Tax Residence: The Cornerstone of Belgian Taxation
Before discussing rates, deductions, or property tax, you must determine whether you are considered a tax resident or non-resident in Belgium. Everything else flows from this point.
In Belgium, tax residence is not based solely on a 183-day rule. The tax authorities primarily look at where your family home is located (spouse, partner, children) and, failing that, where your center of vital economic interests is situated, meaning the place from which you manage your assets or business.
Registration in the National Register creates a presumption of tax residence in Belgium. This presumption becomes irrefutable if the family lives in the country. Conversely, removal from the register is not sufficient to prove the end of tax residence if essential ties with Belgium persist.
For married or legally cohabiting couples, residence is assessed jointly: either both are residents, or both are non-residents. Changes of residence during the year can lead to pro-rating of certain tax benefits.
In practice, a continuous stay of 24 months abroad is often considered a minimum for the tax authorities to accept a permanent transfer of the family home outside Belgium. However, this does not preclude that a shorter stay, combined with strong factual elements (employment, permanent housing, children’s schooling) in another country, could also be accepted, subject to review.
Residents, Non-Residents: Which Income Is Taxable?
Once tax residence is determined, the scope of taxation changes radically.
A Belgian resident is taxed on their worldwide income: salaries, pensions, Belgian and foreign real estate income, dividends, interest, taxable capital gains, etc. However, double taxation treaties prevent the same income from being taxed twice, through exemption or tax credit mechanisms.
A non-resident is taxed only on their Belgian-source income. This notably includes:
For a non-resident individual in Belgium, Belgian tax law subjects several categories of Belgian-source income to tax. This includes: remuneration received for professional activity physically performed on Belgian territory; pensions where the payer is established in Belgium; income from real estate located in Belgium, such as rental income or the cadastral income of properties; as well as certain Belgian investment income, like dividends and interest, the tax treatment of which depends on applicable withholding tax rules and provisions of tax treaties to avoid double taxation.
For expatriates who work in Belgium but keep their family abroad, the line between resident and non-resident can be tricky. Belgium applies the concept of the “economic employer” and considers factual circumstances, in line with OECD commentary. Hence the importance of documenting the situation (contracts, foreign residence certificates, tax residence certificates).
Progressive Income Tax Scale
Personal income tax is calculated in brackets, at progressive rates. Recent brackets show a strongly progressive scale, with a marginal rate reaching 50% at a relatively moderate income level compared to some countries.
For the 2025 income year (tax assessment year 2026), a representative scale is as follows:
| Taxable net income bracket (EUR) | Federal rate |
|---|---|
| 0 – 16,320 | 25% |
| 16,320 – 28,800 | 40% |
| 28,800 – 49,840 | 45% |
| Above 49,840 | 50% |
This scale is then subject to reductions, notably the tax-exempt income allowance, set around €10,910 for the 2026 tax year, with significant increases per dependent child. This personal exemption reduces the effectively taxed base.
Within a joint tax return, the professional income of each spouse is taxed individually. However, other income (such as real estate and investment income) is generally pooled and declared under the name of the spouse with the higher professional income.
For expatriates, the combination of the progressive scale, child-related benefits, and deductible expenses (social security contributions, professional expenses) can significantly affect the final tax bill. Regular simulation using the official Tax-Calc tool, provided by the SPF Finances, is helpful to get an estimate.
Local Surtaxes: Municipalities, Non-Residents and the Reality of the Effective Rate
The tax calculated at the federal level is only part of the bill. Municipalities can add a surtax percentage to the tax of residents, ranging from 0% to 9%, with an average around 7%. In Brussels, this surtax is known as the IPP supplement; in practice, it often significantly increases the overall burden.
A few examples illustrate these variations:
| Locality (residents) | Announced IPP surtax | Notable comment |
|---|---|---|
| City of Brussels | 4.9% | Lowest rate in the Brussels Region |
| Etterbeek | ~7% | Recent decrease of 0.2 points |
| Uccle | ~8% | Slight decrease after prior increases |
| Knokke-Heist / Koksijde… | 0% | Zero surtax, but high municipal tax on 2nd residences |
Non-residents, on the other hand, do not pay a municipal surtax per se. Instead, a uniform federal surtax of 7% is applied to the tax due. The Constitutional Court has validated this mechanism, considering that non-residents also benefit from public services that enable them to generate Belgian-source income.
Percentage of additional surtax applicable to Belgian real estate income for an expatriate owning a rental property.
Employment Income, Expatriate Regime and Social Security Contributions
Belgium taxes salaries and wages broadly: anything received in connection with employment is, in principle, taxable. This includes benefits in kind (company car, housing, stock options), bonuses, commissions, cost-of-living allowances, and other supplements.
Mandatory social security contributions levied in Belgium or another country are fully deductible for tax calculation. For an employee, the employee portion is around 13.07% of gross salary, and the employer portion about 25%, making a total social cost of around 38%. In addition, there is a special social security contribution borne by the employee, capped at just over €700, which is not deductible.
Options to remain covered by your home country’s system and avoid double contributions during an expatriation.
Expatriates on assignment can remain affiliated with their home country’s social security if covered by an A1 certificate or a specific bilateral agreement.
Example: Belgium has a convention with the United States to avoid double contributions and allow for the cumulation of insurance periods in both countries.
A Special Regime for “Inbound” Workers
Since 2022, a new tax regime has replaced the old 1983 expatriate status. It targets managers, specialists, and certain researchers recruited from abroad or assigned by an international group to a position in Belgium.
Access conditions for employees and directors notably include:
– Not having been a Belgian tax resident nor subject to Belgian tax on professional income in the 60 months preceding arrival;
– Not having resided within a 150 km radius of the Belgian border during that same period;
– Earning a minimum gross annual income, set at €75,000, with a planned reduction to €70,000 from 2025.
For researchers, the remuneration threshold does not apply, but one must justify a specific scientific degree or ten years of relevant experience, and dedicate at least 80% of their time to research. Company directors are excluded from this researcher sub-regime.
The major benefit of this regime for an expatriate lies in the treatment of part of the remuneration as a reimbursement of “costs specific to the employer.” A lump-sum allowance can be paid on top of the salary and be exempt from tax and social security contributions. Initially set at 30% of gross remuneration with a cap of €90,000, this allowance is expected to be raised to 35% without a cap, according to a bill published in the summer of 2025.
Expatriate Tax Regime
In addition to this allowance, certain specific expenses can also be reimbursed tax-free:
– Relocation expenses to Belgium;
– Installation and furnishing expenses up to approximately €1,500 in the first six months;
– Children’s school tuition fees in Belgian institutions.
The regime is granted for five years, with a possible single extension of three years, for a maximum duration of eight years. The employer and employee must submit an electronic application within three months of starting activities in Belgium.
It is important to note that, unlike the old regime, beneficiaries are now, unless a certificate states otherwise, considered Belgian tax residents. They are therefore taxed in principle on their worldwide income, with application of tax treaties.
Investment Income, Capital Gains and New Taxation of Investments
Traditionally, Belgium stands out for its relatively favorable taxation on private investments: interest and dividends are subject to a final withholding tax, and realized capital gains from the “normal” management of private wealth are largely exempt. But this environment is evolving.
Dividends and interest received through a Belgian financial institution are generally subject to a final withholding tax of 30%. Some exceptions exist: for example, an interest exemption on regulated savings accounts (just over €1,000 per year, with the surplus taxed at 15%), or a limited exemption on a first tranche of dividends (around €800–€900 per year).
Foreign investment income must be declared in the annual return of residents, with tax paid upon receipt of the assessment notice. A European Union court ruling led to the removal of municipal surtaxes on this foreign income. In some cases, notably for French dividends, the Belgian Supreme Court has allowed the possibility of recovering part of the foreign tax to avoid excessive withholding.
A New Tax on Financial Capital Gains
A major reform is in preparation: a specific 10% tax on capital gains from certain financial assets, realized by individuals in the context of normal private management, is scheduled to take effect from January 1, 2026, although the final text has not yet been adopted.
The following would be targeted:
– Listed and unlisted shares, bonds, ETFs and investment fund shares, money market instruments;
– Derivatives (options, futures, CFDs);
– Certain investment-linked life insurance policies (branches 21, 23, 26 and similar foreign contracts) excluding pension and retirement savings;
– Crypto-assets, including NFTs;
– Currencies and investment gold (other physical precious metals would be excluded).
Only the annual net capital gain exceeding €10,000 per taxpayer is taxed at 10%. Losses can only be offset against gains from the same asset category and for the same year; no carryforward of losses to subsequent years is allowed.
A sophisticated mechanism protects “historical” capital gains accrued before the reform. The market value as of December 31, 2025 would serve as the new acquisition cost. Gains accumulated before that date would remain, in essence, outside the scope of the tax. Until December 31, 2030, if the original purchase price is higher than this end-2025 market value, the taxpayer could opt to use this historical cost as the base, subject to providing supporting documentation.
From 2026, new Belgian tax residents benefit from a ‘step-up’: their financial assets held upon arrival are deemed acquired at their market value on the date of installation. Only capital gains realized after this date are potentially taxable. In case of arrival during the year, the annual €10,000 capital gains allowance is calculated pro-rata.
Conversely, departure from Belgium would trigger an exit tax: latent capital gains on financial assets would be treated as if the securities had been sold on the emigration date, for the portion accumulated since 2026. However, an automatic deferral mechanism is planned in case of departure to an EU country, an EEA country, or a state bound by a recovery and information exchange treaty. The deferral would be conditional on not selling the securities within 24 months and on annual confirmation obligations to the Belgian tax authorities. If these conditions are met, the exit tax liability would expire after two years, or in case of return to Belgium without a sale in the meantime.
For non-residents, the general rule would remain no Belgian taxation of private financial capital gains, which is important for expatriates who maintain a securities account in Belgium after their departure but are no longer residents.
Property Tax: The “Précompte Immobilier” as Real Estate Tax
For an expatriate buying a home or keeping a property in the country, the Belgian property tax is called précompte immobilier (in Dutch onroerende voorheffing). It is an annual regional tax, increased by provincial and municipal additional centimes, applicable to all built properties (houses, apartments, offices, shops, factories) and non-built properties (land, forests, meadows) as well as certain equipment and tools.
The tax base is not the market value, but the cadastral income, a theoretical net rental value determined with reference to the 1975 situation, then indexed each year by a coefficient. The indexed cadastral income is subject to a regional percentage, to which local surtaxes are added. Ultimately, the effective tax generally represents between 20% and 50% of the indexed cadastral income.
An overview of basic regional rates illustrates the structure:
| Region | Base rate on cadastral income |
|---|---|
| Flemish Region | 2.50% (base, outside corporate context) |
| Walloon Region | 1.25% |
| Brussels-Capital Region | 2.25% |
On top of this base, provinces and municipalities apply “additional centimes”. A concrete example in Brussels shows the dynamic: the municipality of Auderghem increased from 1,990 to 2,440 additional centimes for 2026, while remaining the lowest in the Region; Uccle raised its rate from 2,940 to 3,400 centimes; Watermael-Boitsfort from 3,090 to 3,390. At the other extreme, Schaerbeek peaks at over 4,100 centimes, as does Saint-Josse.
Some Belgian coastal municipalities (Knokke-Heist, Koksijde, De Panne) compensate for the absence of an income surtax with a high municipal tax on second homes. These taxes have been subject to litigation, with courts (the Ghent Court of Appeal and the Supreme Court) having ruled some of them illegal and discriminatory, allowing for organized recourse by owner associations.
Reductions and Exemptions on the Property Tax
The system provides a whole series of reductions and exemptions, sometimes varying from region to region.
Some key points:
Several reductions of the property tax are possible depending on your situation and region: a 25% reduction if your total cadastral income in the region is ≤ €745; reductions for families with at least two dependent children (percentage in Brussels, fixed amount in Wallonia, scale in Flanders); reductions for disabled persons or severely disabled war veterans; a reduction under conditions for properties involuntarily and long-term vacant; a temporary reduction (often 50% for 5 years) for new non-subsidized constructions; and exemptions or reduced rates for properties managed by social real estate agencies (Wallonia/Brussels) or rented under conditions in Flanders.
In Brussels, a fixed “Be Home” premium is granted to owner-occupiers, as partial compensation for the increasing property tax. This amount, which has been around €150–€160 in recent years, is credited directly to the taxpayer.
Certain real estate properties may benefit from a total property tax exemption. This applies notably to places of worship, schools, hospitals, diplomatic missions (subject to reciprocity), certain public services, and nature reserves.
Who Pays the Tax: Owner or Tenant?
In principle, the person holding the main real right to the property on January 1 of the tax year is liable for the property tax. In practice, this is usually the owner, whether they occupy the property or not.
In standard residential leases, it is rare and delicate to contractually transfer the tax to the tenant, and in any case, it is regulated by regional rules. For commercial or office leases, it is more frequent for the contract to explicitly put all or part of the property tax on the tenant, but this stipulation remains a contractual clause between the parties: vis-à-vis the tax authorities, the holder of the real right always remains the debtor.
For expatriate owners who rent out their property, it is therefore essential to clearly distinguish the property tax (précompte, paid via an assessment notice) from the treatment of real estate income tax in the tax return.
Expatriate Property Owner: Taxation of Rental Income and the €2,500 Threshold
A key point for non-residents: as long as Belgian real estate income remains modest, the non-resident tax return is not always mandatory.
When the property is rented to individuals for strictly private use, the tax authorities do not tax the actual rent, but the cadastral income. This income is indexed (coefficient 2.2446 for 2025) and then increased by 40%. The result is deemed to be net real estate income. As long as this taxable income remains below €2,500 per year, and in the absence of other Belgian income, the non-resident is exempt from filing a return. Above this, a non-resident tax return is required.
The threshold control formula is used to determine if a value exceeds a certain predefined threshold. It applies in various contexts, such as quality management, system monitoring, or data analysis, to trigger alerts or corrective actions when the threshold is crossed.
> Taxable Income = Cadastral Income x Indexation Coefficient x 1.40
If this taxable income exceeds €2,500 (or €5,000 for a married or legally cohabiting couple who are joint owners), the Belgian return becomes mandatory, and tax will be calculated using the progressive rates, increased by the fixed 7% federal surtax specific to non-residents. Actual expenses (mortgage interest, repairs, property tax, depreciation) or a flat-rate deduction (40% for built properties, 10% for land) can reduce the tax base.
Taxation threshold for real estate income from a property rented to a company or for professional activity, calculated on the net rental income basis.
An important development complicates life for non-resident owners: a stricter interpretation of the rules now extends the filing obligation. Henceforth, any non-resident who receives professional income of Belgian source, even if exempt by treaty (for example, a Belgian public pension not taxable in Belgium), and who owns real estate in Belgium, must file a return, regardless of the amount of real estate income. The €2,500 threshold no longer applies in this case.
Real Estate Income Tax for Residents: Belgian and Foreign Properties
Belgian tax residents must declare income from all their real estate properties, whether located in Belgium or abroad, with the exception of the principal residence occupied by the household.
For properties located in Belgium and not used as one’s own residence, the tax base is the indexed cadastral income, increased by 40%. For properties located abroad, the system was reformed following condemnations by the Court of Justice of the European Union, which ruled that taxation based on actual rents (for foreign properties) versus a fictitious cadastral income (for Belgian properties) constituted an obstacle to the free movement of capital.
Now, a cadastral income is also attributed to real estate properties held abroad by residents. The calculation is based on the recent market value (or, failing that, an older value) corrected by a historical coefficient and a standard percentage (5.3%) presumed to reflect the net return in 1975. For example, an apartment bought for €200,000 abroad in 2011 might be assigned a cadastral income of around €800 after applying the coefficient and percentage.
The cadastral income of a property abroad is indexed and taxed like a Belgian property. However, if a double taxation treaty exists with the country of location, that country generally taxes the actual income. Belgium then applies an exemption with progression: the foreign income is not taxed in Belgium, but it is taken into account to calculate the tax rate on other income. In the absence of a treaty, a 50% tax reduction on this income is granted.
Taxation of Real Estate Capital Gains
For individuals not engaged in a professional real estate activity, capital gains on real estate are, in principle, exempt, except in a few clearly defined cases.
The rules can be summarized as follows:
The sale of your principal residence is exempt if you occupied it for at least 12 months, including 6 in the year preceding the sale. For another built property sold within 5 years of acquisition, the capital gain is taxed at 16.5% (plus surtaxes). For land, taxation is 33% if held for less than 5 years, 16.5% between 5 and 8 years, and exempt beyond 8 years (surtaxes applicable). A 33% rate may also apply in case of obvious speculation.
The taxable capital gain is calculated as the difference between the sale price and the purchase price, increased by certain costs (registration duties, notary fees, justified renovation costs) and a flat-rate adjustment of 5% per full year of ownership.
Timeframe in years to benefit from a partial refund of registration duties upon the quick resale of a property in Belgium.
For non-resident expatriates, these rules also apply to real estate capital gains realized on properties located in Belgium. If the property was a principal residence when they still lived in Belgium and met the occupancy duration conditions, the capital gain will remain non-taxable. In other cases (for example, an investment apartment resold within five years), Belgium will tax the capital gain according to the aforementioned rates, regardless of tax residence at the time of sale, subject to what is provided in the tax treaty with the country of residence.
Registration Duties, VAT and Acquisition Costs
Besides property tax and capital gains taxation, purchasing real estate as an expatriate involves registration duties (or VAT on new constructions) and additional costs.
Registration duties, paid by the buyer, vary by region and whether it is a first and only own home or an investment:
| Region | First own home | Other properties (investment, second home) |
|---|---|---|
| Flanders | 2% | 12% |
| Wallonia | 3% | 12.5% |
| Brussels-Capital | Partial exemption on the first tranche (approx. €175k–€200k), otherwise 12.5% | 12.5% |
In the Brussels Region, a franchise of around €200,000 on the taxable base exists for first-time buyers who commit to establishing their principal residence there for a minimum period (2 to 5 years depending on the scheme). In Flanders and Wallonia, the reduced rates for a first home are conditional on not already owning another home, and on occupying the property as a principal residence within a determined timeframe.
For a new construction, VAT at the standard rate of 21% applies to the ‘construction’ part. The land, however, is subject to registration duties. A reduced VAT rate of 6% may be applied for certain residential reconstruction projects intended for long-term rental, under strict conditions: complete demolition and reconstruction, specific location, and exclusive use for housing.
In addition to these taxes are:
– Notary fees, regulated and calculated on a regressive scale, around 1–1.5% of the price;
– Administrative costs (approximately €1,000);
– In case of financing, mortgage registration duties (1% of the loan amount) and mortgage inscription right (0.3%).
For an expatriate buying in Belgium, the total of these costs can easily represent between 13% and 15% of the purchase price in regions with high registration duties.
Non-Residents, Thresholds and Filing Obligations
For an expatriate who moves abroad but retains economic ties (pension, real estate, shareholdings), the non-resident rules and filing obligations deserve particular attention.
A non-resident must file a Belgian income tax return if they received taxable Belgian-source income during the year. The filing deadline is generally later than for residents, often in November of the year following the income year. The return can be filed via the MyMinfin online platform, after creating the necessary access.
When the connection to Belgium is solely through real estate, two scenarios emerge:
If your taxable real estate income in Belgium (based on cadastral income or actual rents) is less than €2,500 and you have no other Belgian income, no return is required and only the property tax applies. If this threshold is exceeded or if you receive other professional income or a pension of Belgian source, you are obligated to file a non-resident tax return. Even if a tax treaty transfers the taxing right to another State (resulting in an exemption), this income must be declared as it is taken into account for calculating the tax rate (progression effect).
The calculated tax is then increased by a fixed 7% federal surtax, which replaces the municipal surtax.
The Belgian tax authorities are increasingly attentive to non-residents owning property in Belgium, notably in tourist regions and major cities. Automatic information exchanges and reporting obligations for foreign accounts and structures, including the famous Cayman Tax for certain legal constructions, reinforce this scrutiny.
Strategies and Points of Vigilance for Expatriates
The density of Belgian rules on income tax and property tax can be daunting, but a few key guidelines emerge for expatriates:
For expatriates in Belgium, it is crucial to clarify your tax residence upon arrival, considering not only the number of days in the territory but also the location of your family home and center of economic interests. Anticipate the new financial capital gains tax planned for 2026 by preparing acquisition dates, restructuring portfolios, documenting historical costs, and choosing the location of securities custody wisely. Newcomers can benefit from the “step-up” in value on financial assets and a special tax regime, under conditions (specific remuneration, absence of prior links with Belgium). For property owners, it is essential to monitor developments in the property tax, municipal surtaxes, and possible reductions, ensure the lease contract clearly allocates charges, and consider schemes like management through a social real estate agency. Also monitor the €2,500 threshold for taxable real estate income for non-residents and the presence of any other Belgian income (pension, salary, fees), which can trigger a filing obligation. Finally, any real estate investment must factor in all costs: registration duties, VAT, notary fees, mortgage registration fees, property tax, and potential taxation upon resale depending on the holding period.
For expatriates from countries with worldwide taxation like the United States, there is the added need to reconcile Belgian rules with those of their home tax administration, leveraging foreign tax credits, exclusions of foreign income, and social security agreements to avoid double deductions.
Belgium, although it does not have a general wealth tax, is developing more active taxation of assets (tax on securities accounts, future capital gains taxation). For expatriates, it is essential to plan your tax affairs in advance, obtain reliable valuations of unlisted securities before 2025, and rigorously retain all investment documentation.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
