The differentiated property tax system, already in effect in Flanders, is currently being adopted in Brussels. This innovative system will allow municipalities to adjust the rates of additional cents according to neighborhoods within the same municipality. The goal is twofold: attract investors and revitalize neglected areas.
What is the differentiated property tax ?
Property tax is an annual land tax levied on real estate, calculated based on cadastral income. The traditional model imposes a uniform rate within a municipality, but with the differentiated property tax reform, municipalities will be able to adapt these rates according to neighborhoods. This will allow local taxation to be adjusted based on the economic and social specifics of the areas concerned.
The Regional Ministers' Ordinance Passed First Reading
The ordinance project of regional ministers Bernard Clerfayt (DéFI) and Sven Gatz (Open Vld) has passed its first stage of adoption. This reform concerns the 19 Brussels municipalities and aims to reform the calculation of property tax. Owners will be directly affected by tax rates that vary from one neighborhood to another, creating a more dynamic fiscal policy.
What Are the benefits for municipalities and property owners?
The differentiated property tax reform offers several advantages:
Simplification of taxation: Instead of multiple specific taxes (on offices, shops, land, etc.), municipalities will be able to consolidate these into one clearer and more readable tax.
Fairer taxation: Certain neighborhoods will benefit from reduced rates, promoting fiscal equality between disadvantaged residential and commercial areas.
Attract investors: By lowering taxes in certain strategic areas, municipalities hope to attract new investors, thereby stimulating the local economy.
Revitalize neglected areas: More advantageous rates in areas in need of revitalization will encourage owners to renovate and businesses to settle there.
Support for small businesses: For commercial spaces, a cap could be implemented to support small businesses, while increasing taxes for larger commercial spaces.
How will the differentiated property tax be applied?
The application of this reform follows a well-defined process. Municipal councils must first approve the implementation of differentiated property tax. Then, the regional tax administration analyzes the proposals and gives its opinion. The process is thorough, ensuring that fiscal changes are fair and appropriate.
Conclusion
The introduction of the differentiated property tax in Brussels marks a new step in optimizing urban taxation. With this reform, municipalities will have a powerful tool to encourage renovation, attract investors, and make taxation more equitable. As a commercial real estate agency, at Mesh-Immo, we are here to assist you in understanding this reform and its impact on your commercial and residential properties.
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