How do you declare rental income from a property in Belgium ?
It is essential to distinguish between unfurnished and furnished rental properties : a different tax regime applies to each.
Taxation of unfurnished properties
All income deriving from a dwelling or rights relating to the same property which is not the principal residence of the owner must be declared in the « property income » category. The tax rate is based on the « cadastral income », that is, the theoretical net annual rental income (after deduction of interest on borrowings) of the building according to the property evaluation of the last reference year. To put it plainly, the tax rate is the cadastral income indexed and increased by 40 %. The same rule applies if the property is the secondary residence of the taxpayer and not offered for rent. It is important to note that for properties held in common by couples, each person has to declare property income in a 50/50 proportion.
Good to Know
In the case where a rental property is vacant for 90 days, the owner can reduce the cadastral income as a pro rata of the number of days of inoccupancy.
Taxation of furnished properties
In the case of furnished rental property, where the lease does not allow for a division between one rent for the dwelling and another rent for the furnishing, the tax administration considers that the dwelling rental amounts to 60 % of the total rent and has to be declared according to the rules for unfurnished properties (that is, the cadastral income indexed and increased by 40 %). The rental of the furnishing corresponds to 40 % of the price of the rent and has to be declared in « property income ».