How rental income is taxed
For a private let, the taxable base is the indexed CI increased by 40% — not the actual rent. This is generally very favourable to the landlord. For a professional let or let to a company, the actual rent minus 40% flat-rate expenses is taxed. Both amounts are added to your other income and taxed at the marginal PIT rate (up to 50% + municipal surcharge).
| Type of let | Tax base | Effective tax |
|---|---|---|
| Private (housing) | Indexed CI x 1.40 | Low (CI-based) |
| Professional / company | Actual rent x 0.60 | High (rent-based) |
| Furnished (movable part) | 40% of rent | 30% withholding tax |
Calculation examples
Property with CI of EUR 1,200. Monthly rent: EUR 1,000. Marginal PIT rate: 50%.
Private let: Tax base = 1,200 x 2.1763 x 1.40 = EUR 3,656. Additional tax = EUR 1,828/year.
Professional let: Tax base = (1,000 x 12) x 0.60 = EUR 7,200. Additional tax = EUR 3,600/year.
The private let is taxed on EUR 3,656 while the actual rent is EUR 12,000 — a very favourable gap.
Private vs professional let
The distinction between private and professional letting is crucial for your tax bill. The lease must clearly specify the permitted use of the property.
Key differences:
- Private let: taxed on the CI (much lower than actual rent). Mortgage interest is not deductible.
- Professional let: taxed on actual rent minus 40% (capped at CI x 2/3). Still no deduction for real expenses.
- Via a company: taxed at corporate income tax (20% or 25%), but dividends are then taxed at 30%.
If the lease does not specify the use, the tax authorities may classify the entire rent as professional income if the tenant registers a business at the property address. Always include a use clause in the lease.
For mixed-use properties, include a clause specifying the split between private and professional use (e.g. 70% private, 30% professional). Only the professional portion will be taxed on the actual rent.
Regional specifics
Brussels-Capital Region
The PIT is a federal tax, so the rental income regime is the same across all regions. Brussels applies municipal surcharges on the PIT ranging from 0% to 9% depending on the municipality.
Walloon Region
Same federal PIT regime. Walloon municipalities apply surcharges generally ranging from 6% to 8.5%. The property tax is a separate regional tax.
Flemish Region
Same federal PIT regime, but Flanders has a specific regional PIT component (Vlaamse personenbelasting). Municipal surcharges range from 0% to 9%.
Articles 7 to 13 CIR 92 (taxation of rental income), Article 518 CIR 92 (municipal surcharges) — Texts on Justel