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Property abroad to be taxed in the same way as property in Belgium

In future, people resident in Belgium that own property abroad will see any income they they receive from it taxed in the same way as if the property were in Belgium. From now on they will be taxed according to the “Cadastral Income” of the property rather than on the basis of the amount of rent they receive from their tenants. 

The cadastral income or CI represents the average (fictitious) rental value of the property.  It is the rental price which the taxpayer is deemed to obtain when letting out the property. However, a property doesn’t have to be rented out in order to have a CI. As those of us that are homeowners know, the property tax we pay each year is calculated based on the CI of the house or flat in which we live.

The Federal Cabinet’s decision to use CI as the basis for the taxation of foreign properties owned by people living in Belgium in future came at the suggestion of the Federal Finance Minister Vincent Van Petegehem (Flemish Christian democrat).  

As up until now foreign properties were taxed according to their real rental value rather than based on their KI, those that own property abroad were paying more property tax that would have been the case if their house or flat were in Belgium. This discrepancy was the subject of a case in the European Court of Justice. 

The court found Belgium guilty of discrimination. Anyone with a property abroad has until 31 December 2021 to declare it to the Measurement and Valuation Office (Administratie Opmetingen en Waardering). There a specialised team will calculate the property’s Cadastral Income based on the information provided. 

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