Capital gains tax

In itself there is no general idea in Belgium to tax capital gains. We only have income tax, death tax and registration tax .

Property owned by natural persons, is nearly never taxed on the capital gains on this property. The reason for this is that capital in Belgium is taxed when it's on the move. So, we have inheritance tax and at tax of up to 12,5 percent on the value of real estate, each time the real estate is bought. Capital gains on shares aren't taxed.

In some cases when property is owned by natural persons, capital gains are taxed. The idea behind these exceptions is that there has been speculation, and money made my speculation should be taxed.

The current rate of capital gains tax payable

In the cases that capital gains are taxed, the rate will be 33 percent or 16,5 percent.

The difference depends on how much time elapsed between the moment you aquirered the property and the moment you sold the property. If that period of time is less that 5 years, the tax will be 33 percent. If it's longer than 5 years the tax is 16,5 percent.

Constructable land in Belgium

The first law taxing capital gains, was only hitting capital gains on constructable land. As in Belgium, expecially in Flanders and Brussels, there is a shortage of constructable land, the government wanted to tax money made with land speculation.

So if you resell the land within 5 years after buying it, you will be taxed 33 percentg on the capital gains.

If you resell within 8 years after buying the land, you will still be taxed on capital gains at 16,5 percent.

This capital gains taxation on constructable land excists since the 1980ies.

Land in Belgium with constructions

In 1997 the same concept of capital gains taxation within the first 5 or 8 years after the aquisition of constructable land, was extended to the aquisition of any real estate as long as there are constructions on it. (so not to agricultural land). So now if you buy an apartment building, ask some Polish friends to make it better and resell the building after one year, you will be taxed on capital gains. Off course you will be able to deduct invoices of improvements to the building.

after 8 years

Once you keep a property for more than 8 years, there will be no capital gains taxation on the sale of real estate. The only tax code were capital gains are taxed, is the income tax code. There it's considered a diverse income. Once you fall out of that category, you don't have to fear any taxation of your capital gains, as long as the property isn't owned by a company.

Your own family residence

Capital gains under whatever condition like resale within a very short period of time, will never be taxed, if the property concerned is your own principal family resindence where you reside. The tax law doesn't want to touch own home ownership which was over 70 percent in 2003. But it's important that you are still living in Belgium at the moment you sell your family residence, as a condition is that you can deduct the income tax of your own residence in general income tax, and that can only be so, if you pay full income tax as a natural person in Belgium on your worldwide income.

Capital gains on shares

In very exeptional cases, there is a capital gains tax on shares. This tax was to punish Belgian company owners who wanted to sell the control over their Belgian company to a forein investor. Conditions for this capital gains tax are that your family controls a company and that you sell thoses shares to a foreign investor. In such a transaction you should ask advice about this tax.

Property owned by a company

Property owned by a company, is written off. Then it can stay in the books without being taxed. After realisation of the property or after liquidation of the company, the real value of the property will show up and be taxed as a profit under company income tax taxation. A company can only make 'professional income'.

Professinal property

Property used by an individual to gain professional income will be taxed on capital gains if costs of aquisition have been deducted as investment to make an income. These capital gains will be considered a diverse income. There are several ways to pay the tax. There are special tarriffs.

Real easte located outside Belgium

The Belgian capital gains tax on real esate can only hit capital gains on real esate located in Belgium .

Belgie

This page is free general information to communicate the ideas. For exact legal advice, you should consult a professional and present him your case.