Flemish Government Agreement on Tax Measures

An agreement has been reached to form a new government for the Flemish Region. The government agreement for 2024-2029 contains several measures concerning taxes which belong to the Flemish regional competences. In many instances, the general direction is indicated while the details will have to be elaborated later. An overview of the agreed measures is provided below.

1. Inheritance Tax: The inheritance tax will be reformed. Rates will be reduced as from 2026 with the focus on small and medium-sized inheritances. Special attention will be paid to situations where the deceased leaves no one or cannot bequeath in a direct line. The principle that gift tax should not be higher than inheritance tax will be maintained. Unlawful loopholes will be closed. Non-registered gifts will be subject to inheritance tax if the donor deceases within 5 years (previously 3 years).

2. Registration Tax: The rate for the purchase of the sole and primary residence decreases from 3% to 2% starting 1 January 2025. The rate for purchases by professional sellers increases from 4% to 6%.

3. Job Bonus: The fate of the job bonus depends on the introduction and scope of a tax reform on the federal level.

4. Service Vouchers: Although there is no mention thereof in the government agreement, the price of a service voucher would increase from EUR 9 to EUR 10 and the tax deduction would be abolished.

5. Property Tax: The favorable regime for those achieving a certain Energy-level during renovations is no longer considered necessary or desired. The tax benefits associated with real estate heritage will be abolished.

6. Vehicle Tax and Registration Tax: The fiscal support for zero-emission vehicles is no longer desired. The abolition of the exemption, however, will only impact new registrations. For leased vehicles, consultation with the other Regions will be organized.

7. Kilometer Charge for Trucks: The kilometer charge will be optimized. Consultation with other regions will be organized to align with the revised Eurovignette Directive. A contribution will also be asked from non-subject foreign vehicles.

8. Tax on Games and Bets: The rate structure will be harmonized. The tax will be increased, if agreed upon by the other Regions.

9. Miscellaneous: Water levies will be reformed based on consumption and the 'polluter pays' principle. The vacancy and dilapidation tax will be reformed and simplified.

Details of the politically agreed Flemish tax measures will be elaborated in the coming months. KPMG is monitoring these developments and analyzes its implications for taxpayers. At the same time, we are also awaiting the formation of a new Belgian federal government, and its plans for reforming the taxes which belong to the federal competences.

If you have any questions concerning the above, or other regional or federal (planned) tax measures, do not hesitate to reach out to your trusted KPMG advisor.