Depreciation of a rental property in Belgium: possible or not?
Is depreciation of a rental property possible in Belgium? Rules for individuals vs companies, calculation, and tax impact.
Depreciation rules in Belgium
In Belgium, the depreciation of properties depends on the legal form of the owner:
| Form | Depreciation possible | Impact |
|---|---|---|
| Individual (personal name) | No | None |
| SRL / SA (company) | Yes (33 years, 3%/year) | Reduces taxable profit |
| SCI | Yes (same rules as SRL) | Reduces taxable profit |
This is a fundamental difference with France where the LMNP system (furnished non-professional rental) allows depreciation as an individual. In Belgium, no depreciation is deductible as an individual.
The impossibility of depreciation as an individual is offset by taxation on the cadastral income (very advantageous for properties rented to an individual).
Depreciation via a company: how it works
Calculation
Only the building is depreciable (not the land). The allocation is generally:
| Element | Percentage | Depreciable |
|---|---|---|
| Land | 20-30% of the price | No |
| Building | 70-80% of the price | Yes (3%/year over 33 years) |
Example
| Element | Amount |
|---|---|
| Total purchase price | 250,000 EUR |
| Land portion (25%) | 62,500 EUR (not depreciable) |
| Building portion (75%) | 187,500 EUR |
| Annual depreciation (3%) | 5,625 EUR |
| Tax saving (corporate tax 25%) | 1,406 EUR/year |
The depreciation of 5,625 EUR/year reduces the company’s taxable profit, generating a tax saving of 1,406 EUR/year for 33 years.
Depreciation reduces the book value of the property. In case of sale, the taxable capital gain is calculated on the difference between the sale price and the book value (net of depreciation). The more you depreciate, the higher the taxable capital gain.
Actual tax impact: tax deferral, not savings
During ownership
Depreciation reduces taxable profit each year:
- Profit before depreciation: 10,000 EUR
- Depreciation: -5,625 EUR
- Taxable profit: 4,375 EUR
- Tax (25%): 1,094 EUR (instead of 2,500 EUR)
- Annual saving: 1,406 EUR
In case of sale
| Element | Without depreciation | With depreciation |
|---|---|---|
| Sale price | 300,000 EUR | 300,000 EUR |
| Book value | 250,000 EUR | 62,500 EUR (land) + 0 EUR (fully depreciated building) |
| Capital gain | 50,000 EUR | 237,500 EUR |
| Corporate tax (25%) | 12,500 EUR | 59,375 EUR |
Depreciation saved 1,406 EUR/year for 33 years = 46,398 EUR total. But the additional taxable capital gain at 25% = 46,875 EUR extra tax. The balance is virtually neutral — it is a tax deferral, not a real saving.
The real advantage of depreciation is cash flow: you pay less tax each year, freeing up cash to repay the loan or reinvest.
For capital gains in a company, consult our dedicated guide.
Should you create a company to depreciate?
Short answer: no, not solely for depreciation
Depreciation alone does not justify creating a company. Structure costs (accounting, filings, formalities) absorb a large part of the saving.
Depreciation justifies a company if:
- You own 3+ properties (economies of scale)
- Your professional income is very high (marginal rate above 45%)
- You do not plan to sell (no taxable capital gain)
- You combine depreciation + full deductions + estate planning
Individual ownership is preferable if:
- You rent to an individual (favourable RC)
- You plan to sell after 5 years (capital gains exemption)
- You own 1-2 properties (structure costs too high)
For a complete analysis, consult our guide on SCI vs individual ownership. To manage your portfolio, a rental management software centralises documents. To create a lease, use our online generator.
Frequently asked questions
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No. As an individual, depreciation of a building is not deductible from rental income. Only companies (SRL, SA) can depreciate the building. This is one of the reasons why some investors create a company.
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The building is generally depreciated over 33 years (straight-line rate of 3% per year). Land is never depreciable. The land/building split is generally 20-30% land / 70-80% building depending on location.
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Yes, to reduce taxable profit during the holding period, but not for resale. Depreciation reduces the book value of the property, which increases the taxable capital gain upon sale. It is a tax deferral, not a permanent saving.