Property tax increases annually
Yes, property tax (precompte immobilier) generally increases each year because it is based on the indexed cadastral income, which follows the consumer price index (not the health index). The landlord cannot pass this increase to the tenant through rent indexation.
Property tax in Belgium is calculated using:
- The base cadastral income (revenu cadastral) of the property
- An annual indexation coefficient set by royal decree
- Regional and municipal surcharges (centimes additionnels)
The annual increase is primarily driven by the indexation of the cadastral income, which follows the consumer price index rather than the health index used for rent indexation.
How property tax is calculated
The calculation follows this structure:
- Base cadastral income (set by the administration, rarely revised)
- Indexed cadastral income = Base CI x annual indexation coefficient
- Property tax = Indexed CI x regional rate x (1 + municipal surcharges)
The indexation coefficient increases annually, which means the property tax rises even if the base cadastral income and tax rates remain unchanged.
Keep track of your annual property tax bills. The increase is usually modest (1-3% per year), but over a long holding period, it can significantly impact your net rental yield.
Property tax vs rent indexation
These are two distinct mechanisms that should not be confused:
| Aspect | Property tax | Rent indexation |
|---|---|---|
| Index used | Consumer price index | Health index |
| Frequency | Annual | Annual |
| Who pays | Landlord | Tenant (indirectly) |
| Calculation | CI x coefficient x rates | Base rent x index ratio |
| Can be passed to tenant | No (not through indexation) | Yes (via indexation formula) |
The landlord bears the property tax as a cost of ownership. It cannot be added to the rent or included in the indexation calculation.
Regional specifics
Brussels-Capital Region
Brussels applies a regional rate of 11.25% plus municipal surcharges. The total effective rate ranges from 20 to 40% of the indexed cadastral income depending on the municipality. The Ordinance of 27 July 2017 does not modify property tax rules.
Wallonia
Wallonia applies a regional rate of 12.5% plus municipal surcharges. The total effective rate ranges from 30 to 60% of the indexed cadastral income. The Decree of 15 March 2018 does not affect property tax calculations.
Flanders
Flanders applies a regional rate of 3.97% (after reform) plus municipal surcharges. The Flemish Housing Rental Decree of 9 November 2018 does not modify property tax rules.
Income Tax Code 1992 (CIR 92), articles 249 and following. The indexation coefficient of the cadastral income is fixed annually by royal decree.