How can you gift property with 3% tax?

Gift tax has been reduced in all three Regions, leading to an increase in gifts of property to children.
The rate is said to be 3% today, but what is the actual situation? Let’s take a closer look!

Gift tax calculated in “portions”

Parents gifting a property located in Belgium to their children will have to pay gift tax, as the gift must be registered, making this tax payable.
This tax is progressive: in other words, the applicable rate increases according to the value of the gifted property. The basic rate is 3% and rises progressively to a maximum of 27%.
It should be noted that gift tax is calculated separately for each donor and beneficiary. It must therefore be calculated in “portions”.
For example, if two parents jointly gift a flat to their two children, the gift consists of four “portions” (two donors and two beneficiaries). As the 3% rate applies to the first band of €150,000, the maximum amount subject to this rate is €600,000.

Be aware that the cost of this tax can rise quickly.
Let us take the example of parents wishing to gift two flats with a total value of €1,000,0000 to their only son.
He will have to pay €127,000 in gift tax: (€150,000 x 3%) + (€100,000 x 9%) + (€200,000 x 18%) + (€50,000 x 27%).

Making several gifts at 3%?

To avoid these higher rates, it may be tempting not to gift everything at once, but instead to make gifts in separate portions of up to €150,000. This resets the calculation each time and the basic rate of 3% applies. This practice is entirely legal.
That said, start making your gifts in good time, as there is a three-year waiting period between each gift.

Good to know: in Flanders and Wallonia, if the donor dies within three years of making the gift, it will be taken into account when calculating inheritance tax.