Are you about to purchase a property in Belgium? Do you know exactly what residence taxes apply here? To help you gain a clearer idea, BuyerSide provides an overview of the various taxes that will be claimed from you for your home.
The residence taxes
Depending on the region, the province and the commune in which you live, you will have to pay different residence taxes. These may, for example, include the taxes on the radio and television licence, household waste and the waste-water treatment system. To find out the exact amounts, consult the authorities concerned directly.
The cadastral income
If you buy a property with a view to letting or as a second residence, you will also be taxed on what is known as the cadastral income. The cadastral income represents the theoretical average normal net income which the property can yield for its owner in one year. For older properties, the reference point to date is 1 January 1975. For more recent properties and those renovated further to the granting of an urban planning permit, the reference point is the date of enrolment in the cadastral register or the date on which the renovation work was completed.
So you have to declare the indexed cadastral income x 1.4 (plus 40%) in your tax return. This amount will then be taxed at the marginal tax rate on earned income which will be applied to you depending on your situation. It should be noted that the interest on your real-estate loan can be deducted from your tax base.
The cadastral income on property occupied as a main residence does not have to be declared.
The advance property tax
This regional tax is payable annually. The amount represents a certain percentage of the cadastral income and may variable considerably depending on the commune where you live. For a new residence, it is due for the first time as of 1 January following the year in which the property is first occupied. Consequently, it is preferable to occupy a property as of 5 January rather than as of 25 December of the previous year. It is also worth noting that if a deed of sale is drawn up during the year, the sellers and buyers have to make arrangements between them to share the advance property tax.