Capital gains on property in Belgium: when are they taxed?

A built property resold within 5 years

The basic rule: the tax applies “only if there is a period of less than 5 years between the two transactions”. The dates used are those of the notarial deeds of purchase and sale, not those of the sale agreements (compromis).

The capital gain is taxed at 16.5%, whatever the amount of your other income. Municipal surcharges and the crisis contribution come on top. It is declared in your personal income tax return for the year following the sale.

If the seller is not a Belgian resident, the notary withholds the tax and pays it over to the tax administration.

Property received as a gift

If you received the property as a gift, the tax may also apply, when both conditions are met:

• no more than 3 years between the gift and the resale;
• no more than 5 years between the donor’s purchase and the resale.

Property received through an inheritance is not covered by this rule, according to notaire.be. See also our guide on gifting property.

The family home exemption

The tax does not cover, says notaire.be, “the dwelling house occupied by the seller as a family home”. If you sell the home where you lived, the capital gain is therefore not taxed on this basis. The precise conditions (length of occupation, outbuildings, garden) are not detailed in the pages consulted: ask the notary or the tax administration how your situation is assessed.

Other exemptions exist according to the same source:

• sales of property belonging to minors or persons treated as such;
• capital gains made on an expropriation in the public interest.

Undeveloped land

For land, two periods apply:

The notaire.be pages consulted do not provide for this type of taxation beyond 8 years. For land held longer, still check your file with a notary.

Speculation: 33%

A capital gain arising from a speculative transaction is taxed at 33%. This means profits drawn from “risky” management, outside any professional activity. The administration judges this on several criteria: the notary does not list them on the page consulted. If you buy and resell often, talk to a professional before signing.

How the capital gain is calculated

The capital gain is the difference between:

• the purchase price, that is the price paid plus the costs actually paid;
• the resale price, minus the costs of sale.

Notaire.be gives a few pointers for the purchase price:

• costs can be set at a flat rate of 25% of the price, increased by 5% per full year elapsed;
• works carried out by registered contractors can be added;
• works carried out by the owner, their family or informal labour do not count.

If the registration administration values the property above the sale price, that value is used.

Remember the principle: the higher the justified costs and works, the lower the taxable capital gain. So keep your invoices from registered contractors and your statements of costs.

When should you worry about it?

Ask yourself three questions before signing: how long has the property been yours, how did you obtain it (purchase, gift, inheritance), and did you occupy it as your family home? If you bought less than 5 years ago and the property was not your home, the tax may apply. The relevant dates are those of the deeds: if a resale comes close to the fifth anniversary of the purchase deed, waiting a few weeks can change the outcome. Talk to the notary before setting the date of the deed.

Which professional to consult

The notary knows the capital gains rules and points them out at the time of the sale. An accountant or tax adviser can prepare your return. If your situation is unusual (gift, inheritance, land, repeated sales), get advice before the sale agreement. For the course of a sale, see the steps to sell your house.