Where do Brussels' municipalities get their money? And how is it spent? A Belfius's analysis breaks down the finances while pointing to worrying signs on the horizon.
As the money tap from the Brussels-Capital Region (and, above that, the federal government) turns off, Brussels' 19 municipalities increasingly have to rely on their tax revenues to fund services, according to a new analysis of their 2026 budgets by commercial bank Belfius.
Revenues from other levels of government, in the form of grants and subsidies, are budgeted to increase just 1.2% this year, below inflation.
Meanwhile, the revenue sources that will grow the most are "those for which municipalities have decision-making authority."
In total, municipalities in Brussels will receive €1.76 billion through taxes and other service revenues, up 7.5% in the year, to reach an average of €1,432 per resident.
The biggest rises come through communal surcharges on property (+10.4%), other local taxes (+4.5%) and supplementary local income tax (+2.4%).
In Brussels, municipalities depend on their own taxation and charges for three-fifths of their revenue, with the other 40% coming from government subsidies. In other major cities, this split is reversed.
Municipalities in Brussels have been restraining spending
In total, municipalities in Brussels are budgeted to spend €3.3 billion this year, or around €2,715 per resident, and will balance this by raising a similar amount through taxes and transfers from other sources.
40% of the money municipalities spend does not go to the municipality itself, but to other organisations they fund, such as the public centres for social welfare (CPAS), police, and emergency zones.
Overall, the pace of spending by communes has been slowing; the initial budget for 2026 of €3.3 billion is 2.5% more than 2025, but sits below an average of 5.9% over the last five years.
The number of municipalities with unbalanced budgets is also declining, Belfius said, with only two this year, down from 10 in 2024. The figures exclude Saint-Josse-ten-Node, as no budget was available at the time of Belfius's study.
Budgets unlikely to match spending
Budgets are unlikely to match actual spending this year, as inflation has shot past what was expected when communes sat down to prepare their budgets.
Back in December 2025, inflation was originally forecast by the National Bank of Belgium to come in at 1.9% for 2026, but is now expected to be 3.4% for the year. A result of a new energy crisis caused by the ongoing war in Ukraine and the new war in Iran.
Growing inflation is not the only concern, as interest rates have also risen.
Communes in Brussels will spend €319 million on debt repayment this year. About one euro in every five euros of debt repayments goes to interest. Total borrowing charges (which also includes short-term debt), has risen by almost €70 million, or 175% since 2022.
Interest as a share of debt repayments will only grow as interest rates continue to rise (surpassing 4% in recent months) and loans are refinanced.
Rising costs and debt interest repayments are not the only pressures mounting on Brussels municipality finances in the coming years.
Recent changes to unemployment benefits in Belgium have increased the number of residents turning to CPAS services for support; municipalities fund these services.
As more long-term unemployment benefit recipients see their benefits cease (despite a temporary reprieve from the Constitutional Court), more are expected to turn to CPAS services unless they find a job, a prospect that is becoming increasingly difficult.
Looking longer term, communes also have to top up the pension pot for their workers as it faces a funding deficit. Belfius noted that while municipality personnel costs are set to increase by a modest 1.9% in the budget, pension costs, which sit within this budget, are rising faster.
Communes have been raising property taxes this year to fill their expected budget gaps, with the City of Brussels shifting the burden onto landlords who do not live in their properties.
As inflation remains elevated, communes will need to assess their options as they plan their 2027 budgets and close gaps left by higher inflation-driven spending in 2026.
