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Wallonia reduces gift tax

In the wake of the tax reform in December 2017, the Walloon government is proposing to reduce the gift tax of houses and apartments and to simplify the calculation of the tax. Wallonia follows Flanders and Brussels.

The gift tax is calculated depending on the relationship between the donor and the donee and the value of the gift.

In direct line (between parents and children) and between spouses and civil partners

On the bracket between

€0 and €150,000

€150.000 and €250.000

€250,000 and €450,000

Over €450,000€

3%

9%

18%

27%

For everyone else (siblings, uncles and nieces, and friends)

On the bracket between

€0 and €150,000

€150.000 and €250.000

€250,000 and €450,000

Over €450,000€

10%

20%

30%

40%

The maximum rate was 40% for brothers and sisters and 50% for everyone else.

If the beneficiary of the gift carries out works to make the property more energy-efficient, he will be able to recover part of the gift tax: 25% of the cost of the works with a maximum of €2,500.

Author: Marc Quaghebeur

Marc Quaghebeur is a Belgian tax lawyer with Cabinet DAVID specialising in international tax issues and cross border estate planning. He is a member of the Brussels Bar and the Society of Trust and Estate Practitioners. He

Comments 2

  1. So basically between husband and wife whereby the property is split 50/50, upon death of either person, the widow has to pay say 18% if the property is valued over €250,000.

    Did I get this right?

    1. Post
      Author

      I am afraid not.

      This article deals with gift tax, that is the tax due on gifts between living people. If a husband were to give his part of the house and that half is worth €300,000, the gift tax would be calculated as follows:

      0 – 150,000 = 3% = €4,500
      150,000 – 250,000 = 9% = €9,000
      250,000 – 300,000 = 18% = €9,000

      The total gift tax would be €22,500

      When a husband dies, the wife must pay inheritance tax and since 2018, Wallonia gives a full exemption of inheritance tax for the family home. There would be no inheritance tax when the husband dies … if … the wife inherits.

      If the wife inherits with the children, the wife does not pay inheritance tax but the children pay inheritance tax.

      This means the husband must make a will to give his part of the house to his wife (beware of the forced heirship rules for the children).

      However, when the children inherit the entire house from the wife, they will pay (more) inheritance tax on the entire house, unless the husband made a provision in his will to this effect.

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