In Belgium

Rental income encompasses all sums received by a landlord from letting their property: rent, recoverable charges, and any other payments related to the letting.

The Belgian tax treatment of rental income is distinctive:

  • Private letting (to individuals for residential use): the owner is taxed on the indexed cadastral income + 40%, regardless of the actual rent received. This is generally very favourable for the landlord.
  • Professional letting (to companies or for professional use): the owner is taxed on the higher of the actual rent or the indexed CI + 40%.
  • Short-term/tourist letting: taxed on actual income, with specific reporting rules.

How it works

Gross vs net. Gross rental income = total rent + charges paid by the tenant. Net rental income = gross income minus owner expenses (maintenance, insurance, management fees, property tax).

Tax declaration. In the tax return, the property income section requires:

  • The cadastral income of each property
  • For professional lettings: the actual rent and advantages received
  • Mortgage interest for deduction
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Good to know
In Belgium, a landlord letting to individuals for private use is taxed on a fictional income (the CI) that is typically much lower than the actual rent. This makes Belgium one of the most favourable countries in Europe for private residential letting from a tax perspective.

Practical example

Sophie lets an apartment for 850 EUR/month to a family (private use). Her actual annual rental income is 10,200 EUR. However, for tax purposes, she declares the indexed CI (1,800 EUR) + 40% = 2,520 EUR. She is taxed on 2,520 EUR, not on 10,200 EUR — a significant difference.

Key considerations

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Warning
If a tenant registers their business address at the rented property (even partially), the landlord may be required to declare the actual rent instead of the cadastral income for the professional-use portion. Clarify the intended use in the lease.