The Walloon government has published the new contemplated tax measures for registration duties and inheritance tax, which have yet to be debated before the Walloon Parliament. Some of these measures had already been announced this summer, but the government seems to have gone further on matters.
Here is a summary of the contemplated measures.
- Acquisition of own and sole home – 3% rate
The rate of registration duty on the purchase of a property used as an own and solecompre dwelling will fall from 12.5% (the current rate) to 3% for all deeds of purchase signed on or after 1st January 2025 (although the preliminary sale agreement may be signed before this date).
If you already own your own property, you can still benefit from the reduced rate of 3% as long as you sell your current property within 3 years of acquiring the new one.
This measure will replace the tax-free allowance, the housing bonus and the reduced registration duty for modest housing.
- Modernisation of inheritance tax and gift tax to take account of blended and foster families
Direct line rates will be extended to all descendants (not just children) of the spouse/legal cohabitant, to enable grandchildren and great-grandchildren to benefit from favourable rates too.
Children integrated into a foster family will be treated in the same way as the biological children of the deceased/donor.
The date on which these measures will come into force has not yet been announced.
- Donation of real estate – reduction of registration duties
The current rates for gifts of property are identical in the three regions, and range up to 27% in the direct line, between spouses/legal cohabitants and even up to 40% between all other persons.
For donations made from 1st January 2028 by a donor resident in Wallonia, the rates should be reduced as follows:
- Rates ranging from 3% to 14% (above €450,000) for gifts in a direct line or between spouses/legal cohabitants
- Rates ranging from 9% to 20% (above €175,000) for gifts between all other persons (de facto cohabitants, brothers, sisters, nephews, nieces, friends, etc.).
These new rates will make the Walloon Region more attractive from a tax point of view for property donations than the other two regions. The latter could be encouraged to move in the same direction.
- Inheritance tax
- Reduced duties
Current inheritance tax rates in the Walloon Region are particularly high. The rates are progressive and reach 30% in the direct line, between spouses/legal cohabitants, 65% between brothers and sisters, 70% between uncles/aunts and nephews/nieces, and even 80% between all other persons.
As of 1stJanuary 2028, the rates will be overall halved (with the exception of the first brackets, which are already taxed at a low rate in the direct line between spouses/legal cohabitants).
Inheritance tax will be capped as follows:
-
-
- Direct line, between spouses/legal cohabitants: max. 15%
- Between brothers and sisters: max. 33 %
- Between nieces/aunts and nephews/nieces: max. 35%
- Between other persons: max. 40%
-
- Exemption/reduction of inheritance tax on the family home – removal of the condition that the property must have been occupied for 5 years prior to death
Currently, the surviving spouse who takes over the family home is exempt from inheritance tax, and heirs in the direct line (e.g. children) benefit from preferential tax rates. However, the property in question must have been used as the family home for the 5 years preceding the death, but this condition is due to be abolished. The date on which this measure will come into force has not yet been announced.
- Optional lump sum for the deceased’s funeral expenses
Heirs will be able to opt, if they so wish, for a lump sum of funeral expenses to be charged to the liabilities of the estate rather than collecting the various invoices needed to charge actual expenses. The date on which this measure will come into force has not been announced yet.
These measures still have to be debated in Parliament and voted on before the decree adopting them can come into force. We will of course follow with great interest the legislative progress of these announced measures.
For further information, please contact Lida ACHTARI, Counsel, Tax law: lac@daldewolf.com