The average Belgian pays high taxes. There are, however, many possibilities to pay less taxes. Savings and investment in a house, in your pension or in your future are encouraged by the public authorities. You can thus reduce your taxes in different ways.
The tax basket is composed of
- a federal basket for long-term savings
- regional tax benefits for home ownership.
First, the amounts for the housing bonus are deducted (if it still applies) in order to determine the amount which is taken into account for federal long-term savings.
If the tax basket is filled completely by the home ownership tax benefit, there is no longer a tax margin to receive a tax benefit on long-term savings. From a fiscal point of view, it therefore does not make sense to have long-term savings. On the other hand, this also means that when the mortgage loan is (almost) reimbursed, there is once again a tax margin for long-term savings. You must ensure that your tax basket is always full, even after your mortgage loan has been reimbursed, in order to continue to receive a tax benefit. Your financial advisor can help you with this.
The way in which the tax credit is calculated and the conditions to meet in order to receive it depend on
- when you took out your mortgage loan (since 2015, the Regions are responsible for the housing bonus)
- the Region where you live (not on the Region where the dwelling is located)
- the capital repayments and interest for a mortgage loan
- the outstanding balance insurance premiums for your mortgage loan
For more information on this subject, please see the following articles.
- Housing tax for the 2019 fiscal year
- The tax benefit for outstanding balance insurance
- The Flemish Region, for housing loans as of 2016: the integrated housing bonus
- The Brussels Region. For loans as of 2017, the housing bonus was withdrawn and replaced by an increase in the bracket exempt from registration fees.
- The Walloon Region, for housing loans as of 2016: the housing rebate.
You must ensure that your tax basket is always full, even after your mortgage loan has been reimbursed, in order to continue to receive a tax benefit.
Long-term savings not linked to a mortgage loan
If you have not taken out a mortgage loan or if it has (almost) been reimbursed, you will have a large tax margin for the long-term savings system. The long-term savings basket also allows you to include the premiums for other life insurance policies or the capital amortisation of a loan for a second dwelling. You will also benefit from a tax exemption on the premiums paid if you have long-term savings via an investment insurance policy.
Benefit from both the housing bonus and long-term savings
It is possible to combine the housing bonus and long-term savings, but in practice (and above all for loans before 2015), most of the time the home ownership tax benefit is enough to fill the basket completely. You can therefore rarely combine both. Your financial advisor can help you with this.
Besides the long-term savings and housing bonus basket, there is also the pension savings basket. Your tax benefit in this case will not depend on your taxable income, but will represent a percentage of the premium paid.
In addition to the long-term savings basket (with the housing bonus) and the pension savings basket, there is the second pillar basket.
For employees, this is the employer's contribution to the supplementary pension (2nd pillar).
For self-employed people, this is:
- the Private Supplementary Pension for the Self-employed (PSPS)
- the Individual Pension Agreement (IPA) for self-employed people in a company
- the Pension Commitment for the Self-employed (PCS) for self-employed people who work as a natural person (new!)
You can therefore combine all of these types of fiscally advantageous savings.