Belgium: Property tax reductions for assets during “unproductive” periods (COVID-19)
Belgium: Property tax reductions for assets
Certain existing tax measures may provide relief for companies that are economically affected by the coronavirus (COVID-19) pandemic.
For example, businesses need to consider if they qualify for a reduction of the annual cadastral income tax on real estate (or property tax) and specifically with regard to a reduction in the property tax for a building or equipment and tools that have remained unproductive due to the coronavirus crisis.
With regard to the property tax, the Walloon government declared that assessments for the 2020 financial year would be sent in August / September 2020 instead of May 2020, and payment plans would be more "flexible.” Other regional governments have not (yet) taken an official position.
The general principles concerning the proportional reduction of the property tax due to periods of unproductivity need to be considered. In general, when constructed immovable property (buildings) and machinery and equipment remain unused for a period of time and have not generated any income, the property is said to be "unproductive,” and the property tax that normally would be paid can then be reduced in proportion to the period of time (number of months) during which the unproductivity lasted and for the extent of this period of unproductivity.
To benefit from such a proportional reduction due to unproductivity, a certain number of conditions must be fulfilled (the conditions differ somewhat for the regions such as in the Flemish region).
- The "unproductiveness" of real estate must last at least 180 days (not consecutive).
- For materials and tools, the period of inactivity is reduced to a minimum of 90 days (not consecutive).
Buildings must have been totally unused and must not have generated any income, whereas equipment and tools can benefit from a reduction if they have only partially not been used for a portion representing at least 25% of their cadastral income.
Read a November 2020 report (French) prepared by the KPMG member firm in Belgium
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