People in Flanders pay the lowest inheritance taxes in Belgium, with the top tax rate in the country's Dutch-speaking Region up to 25 percentage points lower than in the rest of the country.
In a recent study, Het Nieuwsblad noted that for assets inherited from third parties (i.e. people who are neither relatives nor partners of the beneficiary) the inheritance tax rate rises to 55% in Flanders, compared to 80% in Brussels and Wallonia.
Similarly, the highest rate for assets inherited from sisters and brothers is 55% in Flanders but 65% in the country's two other regions. For possessions inherited from aunts, uncles, nieces and nephews, the highest rate is again 55% in Flanders but 70% in Brussels and Wallonia.
The top rate is significantly lower across all of Belgium's Regions for assets inherited from a direct descendant (i.e. parents, grandparents, or great-grandparents) or partner. However, once again, Flanders' top rate remains lower than in the rest of the country (27% vs 30%).
Hidden benefits
Flemish heirs also benefit from their region's tax regime in other ways. For instance, in Flanders the first €50,000 inherited from a partner (i.e. wife, husband, or legal cohabitant) is typically exempt from tax. This is only true for the first €15,000 inherited in Brussels.
Another, more complicated fiscal advantage for Flemish residents is that the region's tax authorities typically split inherited goods into 'movable' assets (e.g. jewellery and furniture) and 'unmovable' assets (e.g. land and buildings). Thus, Flemish residents who are bequeathed a combination of movable and unmovable assets often end up paying a lower tax rate on the split goods than they would if the assets were taxed together.
"The separate taxation of movable and immovable property has a significant positive impact on the tax burden," Carol Bohyn, a spokesperson for Notaris.be, a website run by the Royal Federation of Belgian Notaries, explained to Het Nieuwsblad. "Thanks to this so-called 'split', you as an heir are less likely to end up in the higher tariff brackets and therefore have to pay less inheritance tax."
Brussels vs Wallonia
Comparing the two tax rates in Brussels and Wallonia is a more complicated affair. In some ways, though, the capital's residents experience a higher inheritance tax burden than those living in the country's south.
This is especially true for heirs with little to inherit. In particular, for assets inherited from third parties, Walloons pay 30% tax on those worth up to €12,500 and 35% on those valued between €12,500 and €25,000. By contrast, Brussels residents pay 40% on goods worth these amounts.
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Conversely, although the top tax rate in Wallonia and Brussels is the same across all inheritance classes, the threshold at which the top tax rate applies for assets inherited from siblings is lower in Belgium's French-speaking region (€175,000) than it is in the capital (€250,000).
This effectively means that people living in Wallonia who stand to inherit significant sums from their brothers or sisters can expect to pay more tax than those based in Brussels.
