In Belgium

A markdown (decote) is a reduction applied to a property’s market value to reflect factors that make it less attractive or more constrained than comparable properties. In the Belgian property market, markdowns commonly arise from:

  • Sitting tenant: a property sold with an existing lease in place is worth less than a vacant property (typically 10-20% less)
  • Legal constraints: easements, rights of way, urban planning restrictions
  • Structural defects: dampness, subsidence, asbestos presence
  • Location factors: noise pollution, proximity to industrial sites
  • Shared ownership: properties in co-ownership with management issues

How it works

Valuation context. Markdowns are particularly relevant in three situations: property sales, inheritance declarations, and donation valuations. The tax authorities accept a markdown when it is justified and documented.

Inheritance. When declaring property for inheritance tax, the declarable value is the market value at the date of death. A markdown can be applied for a sitting tenant, structural issues or other documented factors, reducing the inheritance tax base.

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Good to know
A markdown for a sitting tenant is accepted by the tax authorities when declaring property for inheritance or donation. The reduction typically ranges from 10 to 20% depending on the remaining lease duration and the tenant’s protection level.

Practical example

Nadia inherits an apartment in Brussels valued at 280,000 EUR on the open market. However, the apartment has a sitting tenant with a 9-year lease (6 years remaining). The notary applies a 15% markdown: the declared value for inheritance tax is 238,000 EUR, reducing the inheritance duties payable.