As of January 1st 2025, Belgium will end the tax deduction for interest on mortgages for houses other than the principal residence. This measure, decided as part of the 2025-2029 government agreement, is designed to reduce the tax advantages enjoyed by multiple-property owners and generate additional revenue for the State.
Until now, taxpayers have been able to deduct interest paid on mortgages taken out to acquire second house or rental properties, thereby reducing their personal income tax base. From 2025, this deduction will be abolished, affecting both new and existing mortgages.
The abolition of this deduction will lead to an increase in the tax payable by a multiple-property owners, particularly small investors who had relied on this tax advantage to improve the profitability of their property investments.
This reform is part of a series of measures aimed at consolidating Belgium’s public finances, with a public deficit estimated at 4.5% for 2024. The abolition of the interest deduction is expected to generate additional revenue of €210 million a year.
Investors will now have to reconsider the profitability of their property projects without this tax advantage. It is advisable to carefully assess the financial implications of this reform and to consider alternative investment strategies.
In summary, the abolition of the interest deduction for non-primary housing a turning point in Belgian property taxation, with significant consequences for a multiple-property owners and investors.
