Belgium: Real estate taxation and property located in other countries

The tax treatment of real estate located in other countries

The tax treatment of real estate located in other countries

The tax treatment of real estate located in other countries was revised in 2021 to address a situation when foreign real estate was not subject to the same tax treatment as real estate located in Belgium.

With the 2021 revision, foreign real estate will be taxed on the basis of "cadastral income”—that is, the foreign real estate will be allocated cadastral income and for the income year 2021 (tax year 2022), the tax base of the income from the foreign real estate will be calculated on the basis of this cadastral income.

  • For a property structure or building, the cadastral income is to be determined using the current market value, reduced to the market value of the reference period (1975) using a correction factor.
    • Against this market value, a capitalization factor of 5.3% is applied in order to obtain the cadastral income.
    • Since there are no data to determine the market value in 1975 for foreign real estate, a correction factor will be published annually. For the year 2020, the factor is set at 15.036.
  • For land (not built upon property), the cadastral income is set at €2 per hectare.

The new real estate property tax regime applies to foreign property (such as buildings) belonging to Belgian residents—whether subject to individual income tax or corporate income tax. In addition, the new regime applies to certain "legal arrangements" that effectively gives a right to certain foreign immovable property.

The new measures impose certain new requirements on taxpayers (such as those who acquire or alienate a property right in a building located abroad must file a declaration with the Belgium tax authorities within four months of the acquisition or alienation). There are penalty provisions for noncompliance.

Read an August 2021 report (French) prepared by the KPMG member firm in Belgium 

 

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