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“It is only in Belgium that the situation of half a century ago determines your current taxes” – Immo

“It is only in Belgium that the situation of half a century ago determines your current taxes” – Immo
“It is only in Belgium that the situation of half a century ago determines your current taxes” – Immo

“Vincent Van Peteghem does the unthinkable. Not only does he maintain the cadastral income, but he even extends it to foreign real estate. From now on, every Belgian who owns real estate abroad must determine the rental value of these goods in 1975 . ” Here is the opinion of Anton Van Zantbeek, lawyer for Rivus and visiting professor at the Fiscale Hogeschool.

Belgians who own real estate abroad will soon see their taxes increase. By law, they had to declare the actual rental value each year in their personal income tax return. This value is generally not taxed. It is exempt with a reserve of progressivity. This means that it is taken into account for the calculation of the tax rate on other Belgian income. This exempt income then weakens the exempt minimum and therefore the low-taxed income brackets. This increases the tax burden on taxable income.

Belgians who own real estate abroad will soon see their taxes increase. By law, they had to declare the actual rental value each year in their personal income tax return. This value is generally not taxed. It is exempt with a reserve of progressivity. This means that it is taken into account for the calculation of the tax rate on other Belgian income. This exempt income then weakens the exempt minimum and therefore the low-taxed income brackets. This increases the tax burden on taxable income A completely different tax base applies to Belgian real estate. Cadastral income plays a central role here. This is the rental value for 1975. A figure light years away from the current rental value. This cadastral income is often increased by 40%. In other cases, it is the actual rent received minus 40 percent. The last 40 percent is corrected for cadastral income. The difference between the current rental value and the rental value in 1975 is immense. This discrimination was a thorn in the side of Europe. After many convictions, Europe imposed a penalty on Belgium. The Minister of Finance, Vincent Van Peteghem (CD&V), therefore had to go all out. We are obviously waiting for a logical, modern and fair solution, and in any case for the artefact of cadastral income to be removed. The only logical choice is to use the actual rental value. Cadastral income is an outdated concept. And unfair. In the best neighborhoods it is much too low, while in the poor neighborhoods it is much too high. A dilapidated apartment in Molenbeek or Schaerbeek often has a higher cadastral income than a newly renovated farmhouse on the banks of the Lys in Laethem-Saint-Martin. Despite this imbalance, cadastral income determines the amount of taxes you pay (withholding tax, for example) or the amount of aid you receive (for example, grants or scholarships). But Vincent Van Peteghem does the unthinkable. Not only does it maintain the cadastral income, but it even extends it to foreign real estate. From now on, every Belgian who owns real estate abroad must determine the rental value of these goods in 1975. The minister opens Pandora’s box. In 1975, for example, tourism did not exist in Franco’s Spain. So how do you determine the rental value of an apartment in Benidorm or Ibiza, for example? Moreover, everything has to go very quickly. People who bought a property in 2021 are probably already late. You only have four months to submit a declaration to the general administration. For those who already had a property abroad before 2021, the reporting period runs until December 31, 2021. And the Minister does not make it easy for us. A separate declaration must be made for each asset. No joint declaration can be presented. Anyone who has any real right must make an individual declaration. Finally, major renovations and the like must also be declared. In short: bye-bye administrative simplification. And of course, nothing is on a voluntary basis. If you don’t do it spontaneously, you will be fined. These range from 250 to 3000 euros. I don’t understand how such a circus can take place in 2021 without being the subject of a single review. Everyone seems to think it’s perfectly normal to be catapulted in 1975. I can only hope that this stupid reform will be overturned in the great tax reform. It is only in Belgium that the situation of half a century ago determines the taxes of 2021 It is surrealist.Anton Van Zantbeek

Source

Belgium situation century determines current taxes Immo

 
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