Reduction of property withholding tax due to unproductiveness: timely tax screening recommended

In both Flanders and Wallonia, this reduction may, subject to strict conditions, result in significant tax savings when an unfurnished building has not generated any income for a certain period due to circumstances beyond your control.

In principle, the measure only applies to built and unfurnished immovable property. In the Flemish Region, the unproductiveness must have lasted for at least 90 days within the same tax year. This period does not necessarily have to be consecutive. In the Walloon Region, a minimum period of unproductiveness of 180 days generally applies.

Partial unproductiveness may also, in certain circumstances, give rise to a proportional reduction, provided that the relevant part can be sufficiently separately identified. This assessment is always made on the basis of the specific facts and takes into account, among other things, the extent to which the relevant part is physically separable and can be used autonomously.

The burden of proof lies with the taxpayer. The taxpayer must be able to demonstrate that the building was effectively unused and unproductive during the relevant period and that the unproductiveness was not the result of a voluntary choice. Depending on the factual context, consumption data, official certificates, dated photographs, a sales or rental mandate, advertisements, contractor invoices or court documents may, among others, have relevant evidential value.

The reduction is not granted automatically. You must submit a timely and reasoned objection to the competent regional administration. In Flanders, the deadline for submission is, in principle, 31 March of the year following the tax year. In Wallonia, the objection period is generally six months, calculated from the third working day after the assessment notice was sent. A timely analysis of the file and a properly substantiated evidentiary file are therefore essential.

Conclusion

In the event of temporary vacancy, structural unavailability or other forms of unproductiveness, a tax screening may offer significant benefits. A correct analysis of the facts, combined with a carefully prepared evidentiary file, will largely determine whether a proportional reduction of the property withholding tax can be successfully obtained.

Our PKF BOFIDI experts are ready to help

Do you think you may qualify for a reduction due to unproductiveness? Our experts will be happy to help you analyse your file, compile the necessary evidence and prepare the objection.

Contact our experts for a personal assessment of your file and tailor-made advice.

This article was written by Kristof van Hecke.