taxes

How does the Belgium-Spain double taxation treaty affect property owners?

The Belgium-Spain Double Taxation Convention is a crucial document for Belgian nationals who own property in Spain, as it determines how income and gains related to your Spanish property are taxed in both countries.

The treaty follows the OECD Model Tax Convention and covers income tax and capital gains tax (but notably NOT inheritance tax).

Key provisions for property owners: Rental Income — Article 6 gives Spain the primary right to tax income from immovable property located in Spain.

Belgium must then provide relief through a tax exemption with progression.

This means your Spanish rental income is exempt from Belgian tax but is taken into account when determining the tax rate on your other Belgian income.

Imputed Rental Income — Even when not rented, Belgium taxes Belgian residents on the deemed rental income from foreign property.

For Spanish property, this is based on the catastral value.

Spain also charges non-resident imputed income tax (1.1-2% of catastral value at 19%).

The treaty provides relief for the Belgian tax.

Capital Gains — If you sell your Spanish property, Spain has the right to tax the capital gain (currently at 19% for EU residents on the first €6,000 of gain, rising progressively to 28% for gains over €300,000).

Belgium provides relief to avoid double taxation.

Non-Resident Income Tax — As a Belgian owning property in Spain, you must file annual Modelo 210 declarations in Spain.

Wealth Tax — Spain's wealth tax (for assets over €3 million in Valencia) and Belgium's lack of a general wealth tax means this primarily affects Spain.

WOW-Estates recommends engaging a cross-border tax specialist familiar with both Belgian and Spanish tax systems.