In Belgium

The personal income tax (IPP — impot des personnes physiques) is Belgium’s main direct tax on individuals. For property owners, it is the mechanism through which rental income is taxed at the federal level, in addition to the regional property tax.

The IPP and the natural persons tax are the same tax — IPP is the common abbreviation used in practice.

Property income in the IPP depends on the letting situation:

  • Own home (primary residence): exempt from IPP since the 2005 reform
  • Let to individuals for private use: the owner declares the indexed cadastral income + 40%
  • Let for professional use: the owner declares the higher of actual rent or indexed CI + 40%
  • Unlet second property: indexed CI + 40% must still be declared
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Good to know
Belgium taxes rental property income based on cadastral income (a 1975 notional value), not actual rent — making it one of the most favourable systems in Europe for private landlords letting to individuals.

Practical example

David owns two properties besides his primary residence. Property A (let to a family): CI 900 EUR, indexed = 1,959 EUR, declared = 1,959 x 1.4 = 2,742 EUR. Property B (unlet second home): CI 600 EUR, indexed = 1,306 EUR, declared = 1,306 x 1.4 = 1,828 EUR. Total additional property income in his IPP: 4,570 EUR, taxed at his marginal rate (50% if his salary already exceeds 48,320 EUR).

Key considerations

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Warning
When a tenant uses the property partly for professional purposes (e.g. home office registered as company address), the landlord must declare the actual rent for the professional portion. Ensure the lease clearly specifies the use to avoid unexpected tax consequences.