BELGIAN REAL ESTATE TAXATION Acquisition subject

 18 rue Robert Stümper • L-­‐2557 Luxembourg T +352 26 38 92 40 • F +352 26 38 92 41
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BELGIAN REAL ESTATE TAXATION 1. Acquisition of the real estate investment Acquisition subject to VAT As a general rule, the acquisition of a land is not subject to VAT. However, since January 1st 2011, if a person acquires a land and a “new” building (located on this same land) at the same time, this acquisition is subject to VAT. VAT standard rate is set at 21%. Transfer tax and others acquisition costs Where the purchase of real estate property is not subject to VAT, it is subject to transfer tax (12.5% in the Walloon and Brussels regions, 10% in the Flemish region). This rate can be reduced for acquisition by professional real estate dealers under certain conditions (4% in the Flemish region, 5% in the Walloon region, 8% in the Brussels region). Notary fees are composed of a certain amount of deed costs (up to EUR 1,100) plus a percentage of selling price decreasing from 4.56% to 0.057%, the total amount of which is subject to VAT since January the 1st, 2012. There are mortgage duties of 1% of the debt guaranteed by the mortgage. Additional mortgage tax of 0.3% upon transcription into the mortgage registry can be charged. As a general rule, the acquisition of shares of a real estate oriented company is not subject to any transfer duties. Transfer duties can be levied if the transaction is perceived by authorities as a sham or considered to be “abusive”. 2. Holding the real estate investment Net rental income, reduced by deductible expenses, is subject to CIT at a standard rate of 33.99%. As a general rule, renting of a real estate is exempt from VAT, except for hotels where VAT applies at a rate of 6%. The percentage of the real estate tax is determined by the local authorities and is deductible for CIT purposes. Autorisation d’établissement du Ministère des Finances luxembourgeois n° 26/12 en tant que Professionnel du
Secteur Financier agréé par la Commission de Surveillance du Secteur Financier luxembourgeoise.
N° R.C.S. Luxembourg B 94364
TVA LU 19788437
ING Luxembourg S.A.
IBAN LU72 0141 3413 6050 0000
BIC CODE : CELLLULL
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18 rue Robert Stümper • L-­‐2557 Luxembourg T +352 26 38 92 40 • F +352 26 38 92 41
www.finimmo.com
Regional taxes often apply on non-­‐residential developed surfaces with an amount varying according to the location of the real estate. The standard rate of withholding tax on dividends is 25%. Domestic exemptions apply in certain cases. Dividends received by a local corporation are subject to tax at the standard CIT rate of 33.99%. However, if the parent/subsidiary regime applies, 5% of the dividend amount is actually taxable. 3. Selling the real estate investment Selling the Real Estate Property In case of sale within the 2 years after its own acquisition, the seller can obtain a refund equal to 3/5 (Walloon and Flemish regions) or 36% (Brussels region) of the transfer tax originally paid at the time of such prior acquisition. The standard CIT rate is 33.99% for capital gain taxation. In case of sale by corporate non-­‐residents, a CIT (33.99%) is due on the capital gain. Selling the shares of the Real Estate Oriented Company For a sale by resident individuals, capital gain on shares is normally tax free, except in some cases (transaction which is not on the scope of the normal management of one’s private estate, transaction with legal entities established outside the EEA). For a sale by local corporations, the capital gain on shares is normally tax free. If not, the gain is taxable at 25%. For sale by non-­‐residents, the capital gain realized can possibly be taxable in Belgium under certain circumstances if the non-­‐resident seller does not benefits from any tax protection. The present document only has an informative purpose, and constitutes neither a tax advice, nor any part of a contract or an offer. Autorisation d’établissement du Ministère des Finances luxembourgeois n° 26/12 en tant que Professionnel du
Secteur Financier agréé par la Commission de Surveillance du Secteur Financier luxembourgeoise.
N° R.C.S. Luxembourg B 94364
TVA LU 19788437
ING Luxembourg S.A.
IBAN LU72 0141 3413 6050 0000
BIC CODE : CELLLULL
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