hrservices.be banner

Tools

PwC service offerings

Tags

accounting treatment Belgium capital-sharing company cars crisis measures double tax treaty employee employees employment tax EU Regulation 883/2004 exemption fiscal benefit Flanders foreign income HR environment HR Services Human Resources income tax indexation India Lambermont life insurance marital quotient system pensions personal income tax private PC profit-sharing profit participation PTX registration duties salary slips salary tresholds second company car severance pay social security treaty stock option stock option income tax taxation tax reduction tax reform tax treatment Uruguay withholding tax work permit

Site search

Subscribe to our HRS headlines

RSS RSS – HRS Headlines

Sharing knowledge
The Tax Guide in De Tijd/L'Echo was created with the help of our Personal Tax Consultants

Discover Global Office MyTaxes.pwc.com and GlobalSTAR, our worldwide HR & tax web tools

Calculate your car policy’s VAT cost

Go to Benefit in kind VAT impact calculator
26Jan

Change in the tax deduction for the own and sole dwelling

 

On 31 December 2008, the Act of 24 December 2008 was published modifying two points of the regulation on “the right to claim the tax deduction for the own and sole dwelling”.

First change: a liberalisation of the obligation to occupy the dwelling

Before, it was stipulated that in the case of e.g. construction or renovation activities, the dwelling should be occupied before 31 December of the second year following the year of conclusion of the mortgage loan (see former article 115 BIC 92). If this was not the case, the taxpayer lost the tax deduction for the own and sole dwelling.

The new regulation now determines that the taxpayer will indeed loose the tax deduction if he does not fulfil the above condition, but no longer definitively. Indeed, he will receive the tax deduction again as from the year he occupies the dwelling. Please take into account that the taxpayer must occupy the dwelling as from the moment that this is possible.

Second change: abolition of the so-called 15/85-rule

Individuals who conclude a mortgage loan to finance the purchase or renovation of their own and sole dwelling may classify for a tax deduction under certain conditions. In the case of a joint filing, both partners in principle may freely allocate the interest/capital redemptions/life insurance premiums. However, based on the legislation, a minimum of 15% should be allocated to one partner (the so-called 15/85 rule).

According to the interpretation of this legislation by the Belgian tax authorities, this minimum allocation should also be applied if one of the partners has no right to claim this deduction. In other words, if one of the partners has no right to claim this deduction, 15% of the advantage is lost.

This discrimination (which was, according to some authors, never intended by the original Act) is now removed by elucidating article 105 BIC 92. Indeed, this article now explicitly stipulates that there is no application of the 15/85 rule in the case where one of the partners has no right to claim the deduction.

These changes will be applicable as from income year 2008.

Belgisch Staatsblad – Moniteur Belge

Share

Posted: January 26th, 2009