Tax deductions for landlords in Belgium
Which costs can a landlord deduct in Belgium? Mortgage interest, property tax, insurance, works. Guide to legal deductions.
The deduction system in Belgium
In Belgium, tax deductions for landlords depend on the type of tenant:
| Type of tenant | Cost deduction | Method |
|---|---|---|
| Individual (residential) | Limited | 40% flat rate on RC (automatic) |
| Company / professional | Extensive | Actual costs deductible |
| Mixed lease | Mixed | Private share = flat rate, professional share = actual |
This system is fundamentally different from France where all actual costs are deductible regardless of the tenant type. In Belgium, renting to an individual is fiscally more advantageous (taxation on RC) but offers fewer deduction possibilities.
For the complete tax return, consult our dedicated guide.
Property rented to an individual
What is deductible
| Cost | Deductible | Method |
|---|---|---|
| Mortgage interest | Yes | Directly from property income |
| Property tax | No (integrated into RC) | - |
| Non-occupant insurance | No (flat rate) | - |
| Maintenance works | No (flat rate) | - |
| Management fees | No (flat rate) | - |
| Depreciation | No | - |
The 40% flat rate
The tax authorities automatically apply a 40% flat rate on the indexed RC to cover maintenance, repair and charge costs. This flat rate is non-optional: the owner cannot choose actual costs instead.
Taxable income = (indexed RC x 1.40) - mortgage interest
If mortgage interest exceeds property income, the surplus is carried forward to other property income (not to professional income).
For a property rented to an individual, mortgage interest is the only real deduction. All other costs are covered by the flat rate. This is why borrowing to invest is fiscally advantageous: interest reduces the tax.
Property rented to a company
What is deductible
| Cost | Deductible | Condition |
|---|---|---|
| Mortgage interest | Yes | Loan for the property purchase |
| Property tax | Yes | Actual costs |
| Insurance (non-occupant, fire) | Yes | Actual costs |
| Maintenance works | Yes | Actual costs (not improvements) |
| Management fees | Yes | Agency, rental management software |
| Notary fees (purchase) | No | Acquisition costs (not deductible) |
| Improvement works | No | Increase the property value |
| Depreciation | No (as individual) | Reserved for companies |
Choice: flat rate or actual costs
For a property rented to a company, the owner can choose between:
- Flat rate of 40% (capped at 2/3 of the revalued RC): simple, no receipts needed
- Actual costs: more advantageous if actual costs exceed the capped flat rate
In practice, actual costs are almost always more advantageous for a property rented to a company, as the flat rate cap is very low.
Mortgage interest: the key deduction
Mechanism
Mortgage interest is deductible from property income (not from professional income). If interest exceeds property income, the surplus is lost (no carry-forward to other income types).
Optimisation
| Strategy | Effect |
|---|---|
| Borrow as much as possible | More deductible interest |
| Repay slowly | Interest deductible for longer |
| Borrow for works | Deductible interest (if maintenance) |
For calculating the tax impact of your investment, consult our guide on rental income in Belgium. To manage your tax documents, a rental management software generates annual summaries. To create a compliant lease, use our online lease generator.
Frequently asked questions
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Deductible costs depend on the type of tenant. For a property rented to an individual, only mortgage interest is deductible (other costs are covered by the 40% flat rate on the cadastral income). For a property rented to a company, actual costs are deductible: interest, property tax, insurance, maintenance, management.
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Not directly for a property rented to an individual (included in the cadastral income flat rate). For a property rented to a company, maintenance and repair works are deductible as actual costs. Improvement works (new equipment, extension) are not deductible.
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The property tax is automatically integrated into the cadastral income calculation. It is therefore not separately deductible. However, for a property rented to a company, the property tax can be considered a deductible expense from gross income.