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Belgium: Overview
Last Updated:
Jun 25, 2008
After several years of rapid price increases, Belgium’s housing market has slowed due to tighter credit conditions. The average price of dwellings in Belgium rose by a mere 5.7% (2.5% in real terms) in 2007. In 2006, dwelling prices rose 13.2% (10.9% in real terms), and in 2005 prices rose 29.6% (26% in real terms).
Significant slowdowns also took place for apartments and villas. The average price of apartments rose by a mere 4.8% (1.7% in real terms) in 2007, down from impressive increases of 14.7% (12.5%) in 2004, 12% (9%) in 2005 and 11% (8.7%) in 2006.
Belgium has experienced 20 years of house price rises, partly due to strong economic growth, but mostly due to the long period of low interest rates.
Between 2000 and 2007, the average price of Belgian houses rose by 97% (70% in real terms), while apartment prices rose by 84% (59% when adjusted for inflation).
There are no restrictions on foreigners buying property in Belgium. However, roundtrip transactions costs are generally high. Tenancy laws are also biased against landlords – and finally, rental income taxes are moderate to high.
Significant slowdowns also took place for apartments and villas. The average price of apartments rose by a mere 4.8% (1.7% in real terms) in 2007, down from impressive increases of 14.7% (12.5%) in 2004, 12% (9%) in 2005 and 11% (8.7%) in 2006.
Belgium has experienced 20 years of house price rises, partly due to strong economic growth, but mostly due to the long period of low interest rates.
Between 2000 and 2007, the average price of Belgian houses rose by 97% (70% in real terms), while apartment prices rose by 84% (59% when adjusted for inflation).
There are no restrictions on foreigners buying property in Belgium. However, roundtrip transactions costs are generally high. Tenancy laws are also biased against landlords – and finally, rental income taxes are moderate to high.
Read Price History »
RENTAL YIELDS
Last Updated: May 18, 2009
Gross rental yields in Brussels, Belgium are around 5.5%, almost unchanged from last year (5.3%).
An upper-end apartment in central Brussels would cost €2,651 per square metre (sq. m.), according to the Global Property Guide, almost unchanged from €2,514 per sq. m. last year.
The index of apartment prices across Belgium rose 6.26% in 2008, according to the Institut National de Statistique, or 1.73% after inflation.
An upper-end apartment in central Brussels would cost €2,651 per square metre (sq. m.), according to the Global Property Guide, almost unchanged from €2,514 per sq. m. last year.
The index of apartment prices across Belgium rose 6.26% in 2008, according to the Institut National de Statistique, or 1.73% after inflation.
TAXES AND COSTS
Last Updated: Sep 03, 2009
Effective Tax Rate on Rental Income |
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| Monthly Income | €1,500 | €6,000 | €12,000 |
| Tax Rate | 11.6% | 15.6% | 21.9% |
| Click here to see a worked example | |||
Source:
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Rental Income: Personal income tax rates range from 25% to 50%, depending on the taxable net income. The taxable net income is the cadastral value, increased by 40%, minus deductible expenses. As a result, the effective rental income tax is a bit lower than the headline rate, ranging from 12% to 21%.
Capital Gains: Capital gains tax of 16.5% is payable on gains on developed property held for less than five years. After a holding period of five years, no Capital Gains Tax is payable.
Inheritance: Inheritance tax rates in Belgium are progressive and vary according to the degree of kinship, region where the inheritance is opened, and the share inherited by each of the heirs.
Residents: Residents are taxed on worldwide income, at progressive rates, from 25% to 50%.
Capital Gains: Capital gains tax of 16.5% is payable on gains on developed property held for less than five years. After a holding period of five years, no Capital Gains Tax is payable.
Inheritance: Inheritance tax rates in Belgium are progressive and vary according to the degree of kinship, region where the inheritance is opened, and the share inherited by each of the heirs.
Residents: Residents are taxed on worldwide income, at progressive rates, from 25% to 50%.
BUYING GUIDE
Last Updated: Mar 06, 2007
Closing costs are high in Belgium, between 13.9% and 22.1% of property value. The bulk of the cost is accounted for by transfer duties, at 12.5% or 10%, depending on the property’s location. Roundtrip costs for new properties are much higher because of the 21% VAT.
LANDLORD AND TENANT
Last Updated: May 30, 2006
Belgian law is pro-tenant.
Rents: Rents can be freely negotiated but rent increases above the inflation rate cannot be written into the contract. If there is a written contract, the rent will be automatically adapted once a year in accordance with the cost of living. Deposit payments must not exceed three month’s rent.
Tenant Security: Belgium’s landlord and tenant law is restrictive as regards the length of rental contracts. The main options for the duration of a lease are: a contract of 9 years and, alternatively, a contract for less than three years.
Rents: Rents can be freely negotiated but rent increases above the inflation rate cannot be written into the contract. If there is a written contract, the rent will be automatically adapted once a year in accordance with the cost of living. Deposit payments must not exceed three month’s rent.
Tenant Security: Belgium’s landlord and tenant law is restrictive as regards the length of rental contracts. The main options for the duration of a lease are: a contract of 9 years and, alternatively, a contract for less than three years.
ECONOMIC GROWTH
Last Updated: Jun 25, 2008
Weaker economic growth
Belgium is a small developed country in Western Europe, with a GDP per capita of US$42,560 and a population of 10.4 million. Its capital, Brussels, is home to several international organizations, including the headquarters of the European Union and the North Atlantic Treaty Organization.
In 2007, Belgium’s GDP growth rate was 2.8%. Belgium’s economy expanded by an average of 2.6% between 2004 and 2006, higher than the average of 1.05% GDP growth from 2001 to 2003. Real private sector wages rose by 3.8% in 2007, and 3.2% in 2006. The unemployment rate was 7.5% in 2007, down from 8.2% in 2006 and 8.5% in 2005.
The economy is expected to expand by only 1.7% in 2008 and 1.5% in 2009. Real wages are expected to rise by 3.5% in 2008.
Inflation fell to 1.8% in 2007, from 2.3% in 2006 and 2.5% in 2005. Inflation is expected to rise to 3.6% in 2008.
In 2007, Belgium’s GDP growth rate was 2.8%. Belgium’s economy expanded by an average of 2.6% between 2004 and 2006, higher than the average of 1.05% GDP growth from 2001 to 2003. Real private sector wages rose by 3.8% in 2007, and 3.2% in 2006. The unemployment rate was 7.5% in 2007, down from 8.2% in 2006 and 8.5% in 2005.The economy is expected to expand by only 1.7% in 2008 and 1.5% in 2009. Real wages are expected to rise by 3.5% in 2008.
Inflation fell to 1.8% in 2007, from 2.3% in 2006 and 2.5% in 2005. Inflation is expected to rise to 3.6% in 2008.
