Real Estate Belgium
As it has been mentioned in the other articles about Belgian real estate, Belgians are only allowed to rent out their property for no more than 12 months without purchasing a certain type of permit. This type of permit is often called “fiscal lease” (or de fiscale huur) and is another reason why the Belgian system of owning properties may be limited for foreign citizens.
This article will go into detail about what this fiscal lease entails and how an expatriate can purchase one if needed. (Just to give you an idea, at the moment there are 6 types of fiscal leases possible.)
I was asked by some people for examples of documents they have to have when applying for a fiscal lease so I will give you those now. These are from the Belgian Senate’s website and show the absolute basic requirements for a fiscal lease application. You can see that it asks for the notarized deed of sale (or a record of ownership) as well as a lot of personal information about the owner.
Now there are a few things to know about this fiscal lease before trying to purchase one:
1) They can cost up to 40% extra per year, depending on how much your house would have been taxed directly under full Belgian taxes. This is because they consider this fiscal lease as an income tax without requiring you to pay any other taxes such as real estate taxes or transfers. In fact, it’s than being taxed normally – because your house is still considered as having a rental value for 40 years if you decide to sell it.
2) You can only lease your house for 8 years total, after which you have to pay the capital gains tax on your home (which can be up to 33%). This means that you cannot continue leasing the same property indefinitely and will have to move every 8 years or so. However, they do not need to be consecutive – but you must stay within the same region each time. For example: moving from Brussels back to Liège would count as a change of region and would thus allow an extension of your fiscal lease (for another 8 years). But going back to Brussels wouldn’t because it’s in the same “region”.
Note: you have to renew your lease every 8 years, but you can continue living in the house all the time with a valid fiscal lease…
3) A direct consequence of 1), 2) and 3) is that an expatriate who wants to sell their property with a fiscal lease must wait at least 40 years from the purchase date before being able to sell it without moving out or without paying capital gains tax. This may be a very long time if they buy the house (https://www.bluehomes.com/Immobilien-Belgien/B/de/debut.html) as an investment for their children who will inherit it later on. In fact, this could mean that they would actually inherit a more expensive home than what they expected because of inflation and thus inheritance taxes… If we take an adult child whose parents bought him/her (for example) a 50m² house 30 years ago at the price of… €50,000 for example, this child would now have to pay inheritance tax on it even if he/she inherits nothing else. He/she would be inherit the (more expensive) home without any other goods because that is all that was originally owned by their parents.
4) It’s possible for both spouses to get fiscal leases on the same property, but they must comply with certain conditions: – They can’t already own another property; – They must both consent to getting one (or more); – The total surface area of the properties cannot exceed 250m²; – They must not rent out “for commercial purposes”; – Only half of them can work for a wage in Belgium.
5) A fiscal lease is not transferable (but you can easily buy another one when moving to a different house). The tenant cannot sell it or give it away, etc. It’s entirely for the original person who purchased it . 6) The rent must remain 11% of the selling price per year; however there are no other restrictions on how much they can increase this by (or decrease it) after signing – but they will have to “inform” you. If you disagree with the proposed changes they must go through formal channels and might end up in front of a judge… But I’ve seen people saying online that they try to do everything by mutual agreement first before going further. 7) Fiscal leasing has been around for a long time and is not new or recent – it’s not expected to change any time soon.
8) They do not have to be Belgian to lease a property with a fiscal lease – but they must be living in Belgium to stay there for more than six months each year, etc. etc…
9) People tend to think that this kind of leasing may be an option only for the very wealthy who can afford a high priced home, but that is absolutely wrong: all French-speaking regions allow you to get them from as little as €45,000! For example: Liège . Some other regions will even let you obtain one on any house whose selling price does not exceed €140,000. In Brussels you have to pay tax plus 11% rent, which is an initial minimum of €5,090 per year.
10) Fiscal leasing is not regulated by Brussels Region – it’s up to the region itself to decide on its own rules . The object number for fiscal leases in Ici-Belgique/Belgian information is 814.001.
11) A fiscal lease can make a big difference to your finances if you really want to leave Belgium… But since they are based on the selling price of the house (and not its rental value) then there are lots of things that can play against you! You may think that having one will save you money, but this may very well be wrong if you’re asked to prove the selling price of the house (which is not always easy).