Tax advantages of a property company
An SRL can optimise rental taxation by deducting all actual expenses (mortgage interest, depreciation, renovation works, management fees) and benefiting from the 20% reduced corporate tax rate for SMEs. However, dividend distribution is taxed at 30%, and accounting costs add EUR 2,000-4,000/year. The break-even point is typically at 3-4 properties or high rental income.
| Advantage | Personal ownership | Company (SRL) |
|---|---|---|
| Expense deduction | Flat-rate only | All real expenses |
| Building depreciation | Not possible | 3%/year (33 years) |
| Mortgage interest | Not deductible | Fully deductible |
| Renovation costs | Not deductible | Fully deductible |
| Tax rate | Marginal PIT (up to 50%) | ISOC 20% (SME) or 25% |
Comparison scenario
Portfolio of 4 apartments generating EUR 48,000/year total rent. Total expenses: EUR 18,000 (mortgage interest, depreciation, maintenance). Marginal PIT rate: 50%.
Personal ownership: Tax on indexed CI x 1.40 for 4 properties = approximately EUR 7,300/year.
Via SRL: Taxable profit = EUR 48,000 - EUR 18,000 = EUR 30,000. Corporate tax at 20% = EUR 6,000. Dividend (EUR 20,000) taxed at 30% = EUR 6,000. Total = EUR 12,000.
In this case, personal ownership remains more favourable. The company becomes competitive when actual expenses are higher or the portfolio grows further.
Costs and drawbacks
Annual costs of an SRL:
- Accounting fees: EUR 2,000-4,000/year
- Annual corporate tax filing
- Publication costs (Monitor belge)
- Management fees and administration
Key drawbacks:
- Double taxation: corporate tax + dividend withholding tax
- Registration duties at purchase (no reduced rate)
- Capital gains always taxed (tax-free after 5 years for individuals)
- Less flexibility for personal use of properties
The VVPRbis regime can reduce dividend taxation from 30% to 15% after a waiting period, but it requires specific conditions (cash contribution, new shares). This significantly improves the company scenario.
Run the numbers with a tax advisor before choosing. The optimal structure depends on your personal tax situation, portfolio size, financing structure and long-term succession plans.
Regional specifics
Brussels-Capital Region
Registration duties of 12.5% for company purchases. No reduced rate available. Brussels offers no specific incentives for property companies.
Walloon Region
Registration duties of 12.5%. The Walloon reduced rate (3%) is reserved for individuals. No specific regional advantages for corporate ownership.
Flemish Region
Registration duties of 12%. The Flemish reduced rate (1%) is not available for companies. Flanders applies specific rules on rental income paid by a company to its director (requalification risk).
Articles 179 to 219 CIR 92 (corporate tax), Article 269 CIR 92 (dividend withholding tax), Article 18 CIR 92 (requalification) — Texts on Justel