Mandatory valuation of shares under the favourable gift and inheritance tax regime for transfers of family companies as from 1 January 2026.

Exclusion of residential real estate

The main change is that the favourable regime can no longer be applied to transfers insofar as the share value includes ‘residential real estate’.

Residential real estate refers to immovable property that is intended or used primarily for housing.

Residential real estate (e.g. a house) that is used for operational/exploitation purposes is also excluded from the favourable regime.

Building land is also regarded as residential real estate and is therefore excluded.

Agricultural land, industrial land and land for business/industrial activity are not regarded as residential real estate.

Where a building or plot is used both privately and professionally (mixed use), the designation is assessed per cadastral parcel, or per part thereof.

The portion of the share value that represents the value of residential real estate within the family company therefore no longer qualifies for the favourable regime. The exclusion also applies to residential real estate held in participations of at least 10% in a (grand)subsidiary.

This exclusion of residential real estate does not apply to real estate companies, i.e. family companies that meet two criteria:

• at least 75% of turnover comes from residential real estate, and
• the company has at least one employee, expressed in full-time equivalents, both three years before and three years after the transfer.

For companies that meet these two criteria, the reduced inheritance tax rate will apply to the entire value of the shares.

Mandatory valuation report

The favourable regime will only be applied to the residual value, i.e. the total sale value of the shares in the family company reduced by the value corresponding to the residential real estate present.

For every gift or inheritance for which the favourable regime is requested, the valuation of the total value of the shares and of the part corresponding to residential real estate must be carried out by a statutory auditor (who is not the company’s statutory auditor/commissioner) or a certified accountant.

This valuation report is always mandatory when the favourable regime is requested, even if no residential immovable property is present.

This valuation report must state the sale value of the shares in the family company, as well as the sale value of each residential immovable property over which the company (or its subsidiaries) holds a property right.

Vlabel has clarified that debts incurred specifically for residential real estate may not be deducted from the sale value of the property (Vlabel – FAQ). In some cases, this may cause the value that does not qualify for the favourable regime to exceed the total value of the shares …

Please feel free to contact us if you have questions about share valuation or if you would like us to assess the impact on the transfer of your family company.

Author: Frank Bloemen