On April 23, 2024, a new circular, 2024/C/29, was published to clarify the non-deductibility of rents and rental benefits related to real estate, as well as allowances and benefits associated with a real usage right (emphyteusis, superficies, usufruct, servitude, etc.). These rules will apply from the 2024 tax year.
I. Introduction
Article 53 of the Income Tax Code 1992 (CIR 92) lists expenses that cannot be considered professional expenses. The law of December 28, 2023, added a new provision, n° 33, effective from the 2024 tax year. According to this provision, rents and rental benefits for real estate, as well as allowances and benefits under a real usage right on real estate, cannot be deducted as actual professional expenses if:
The lease contract was registered for free
Annex 270 MLH was not respected
II. Commentary
A. Non-Deductibility for Leases Registered for Free
When real estate is rented and the lease is registered for free, rents and rental benefits cannot be deducted as professional expenses. This primarily applies to properties used exclusively as family or individual housing. Properties located abroad are also affected if they would have qualified for free registration in Belgium. An exception exists if the property is rented to house employees or company directors under a legal or contractual obligation.
Example of Exception: A Belgian employer rents housing for a foreign worker temporarily in Belgium. The lease is registered for free. In this case, the employer can deduct rents as professional expenses, provided Article 49, CIR 92, is respected, and Annex 270 MLH is attached.
B. Non-Deductibility for Non-Compliance with Annex 270 MLH
If Annex 270 MLH is not respected, rents and rental benefits are not deductible. This annex must contain detailed information about the property, the amounts of allowances, and the identification details of the lessor or grantor of the real usage right. If information is incorrect but provided in good faith, no penalty will be applied.
III. Examples
Lease Registered for Free: A taxpayer rents a secondary residence near their workplace. The lease is registered for free. Rents are not deductible as professional expenses.
Lease Not Registered: Same situation as above, except the lease is not registered. Rents can be deducted as professional expenses, subject to compliance with Article 49, CIR 92, and Annex 270 MLH.
IV. Effective Date
These provisions are applicable from the 2024 tax year.
V. Conclusion
These new rules clarify the conditions for the deductibility of rents and rental benefits for real estate, as well as real usage rights. To ensure compliance with your tax declarations and optimize your deductions, do not hesitate to contact our firm. We are here to assist you with your tax matters.
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