How is the cadastral income calculated? A guide for owners in Belgium

Anyone putting their home up for sale sooner or later runs into the question how is the cadastral income calculated. The figure appears on your tax assessment and in the deed of sale, yet few owners know where it comes from. It nonetheless helps determine what a buyer will pay each year in property tax, known in Belgium as the onroerende voorheffing in Dutch and the précompte immobilier in French. Below you can read how the tax authorities establish that figure, when it changes and what it means at the moment you sell.

What exactly is the cadastral income?

The cadastral income, KI for short, is not a real income. It is an estimated net rental income on an annual basis: the amount your property would in theory bring in if you let it for a year, after deduction of maintenance and repair costs. The General Administration of Patrimonial Documentation, which many people still know as the land registry or cadastre, assigns that amount to every parcel in Belgium.

A second point explains a great deal of the confusion. The KI is frozen at a reference date, namely 1 January 1975. All parcels are therefore compared with the rental market of that year. That is why the amount on your cadastral extract looks so low next to today's rents. A general reassessment of all Belgian parcels, known as a perequatie, has never been carried out since 1975. Instead, the KI is indexed each year.

How is the cadastral income calculated?

The administration starts from comparison points. These are reference parcels whose rental value in 1975 was known and which closely resemble your home in terms of location, type, floor area, year of construction and comfort. Your property is then assigned a rental value in proportion to that reference.

If no usable comparison point exists, the administration falls back on a second method: a legally fixed percentage of the normal sale value the property would have had on 1 January 1975.

In practice, these elements carry the most weight:

• the habitable floor area and the number of living rooms;
• the location within the municipality and the character of the neighbourhood;
• the comfort, such as a bathroom, central heating, a garage or a lift;
• the method of construction and the state of the building at the reference date;
• the intended use, for example a dwelling, a commercial premises or land.

What does not count is the current market value of your home. Two houses with a comparable sale price can have a very different KI, simply because one has been thoroughly renovated since 1975 and declared, and the other has not.

From base amount to indexed cadastral income

The amount you see on a cadastral extract is the non-indexed KI. For most taxes, that figure is first multiplied by an indexation coefficient which the federal government publishes per assessment year. The indexed KI is therefore considerably higher than the base amount.

It is on that indexed amount that the regions then calculate the property tax. The rate differs from region to region and is topped up with surcharges set by the province and the municipality. Two identical homes with the same KI can therefore receive a different annual assessment, purely because they lie in a different municipality. You will find the coefficient and the rates for the current assessment year at the FPS Finance and at your regional tax authority.

When is your cadastral income revised?

Your KI does not stay the same forever. The administration revises the amount in cases such as new construction, the taking into use of a new building, and alterations that change the home substantially. Think of an extension, converting an attic into a bedroom, installing a bathroom or central heating where there was none, or a change in the intended use.

For owners there is an obligation attached: you declare those works yourself. That is done within thirty days of completion or of the property being taken into use. Anyone who fails to do so risks a fine and a correction with retroactive effect. That can turn out painfully when a notary or a buyer stumbles across it during the sale.

Pure maintenance does not change the KI. A new kitchen, a repainted façade or a replaced roof covering count as maintenance, not as an increase in comfort in the fiscal sense.

What does your cadastral income mean when you sell?

In a sale, the KI plays a part in three ways.

First, it is a recurring question from prospective buyers. They want to know what the home is going to cost them each year, and the property tax is a fixed component of that. A seller who can produce that figure straight away looks prepared and keeps the negotiation businesslike.

Second, the KI is stated in the notarial deed and in the sales file your estate agent puts together. If the amount does not match the actual state of the home, for instance because an alteration was never declared, it will come to light sooner or later.

Third, in Wallonia the KI still plays a role in the reduced registration duty rate for a modest dwelling. This is a Walloon rule and does not apply in Flanders or Brussels. For buyers in that region, your KI can therefore help determine how much registration duty they pay, which indirectly weighs on your negotiating room.

The KI says nothing, on the other hand, about your sale price. Anyone who wants to know what the home is worth today starts from the real market. A free valuation of your home gives a better picture of that, and anyone who wants more than one opinion can compare up to three local estate agents free of charge at IMV.

Requesting or contesting your cadastral income

You will find your KI on the property tax assessment and online via MyMinfin, where you can also download a cadastral extract. It is best to add that extract to your sales file.

If you disagree with a newly set or revised KI, you can lodge an objection. That deadline is short: two months from the notification of the cadastral income. In your objection you state yourself the amount you consider correct. Do not sit on it, because once the deadline has passed the assigned amount stands until a subsequent revision.

How to use this information in your sale

Put three things in order before you bring your home to market. Check whether your KI still matches the actual state of the property. Request a recent cadastral extract so that you can answer buyers' questions immediately. And set your asking price on the basis of the current market, not on the basis of a tax figure from 1975.

For that last step it pays to put several estate agents side by side. Their price estimate, their commission and their approach differ considerably. Via ImmoMakelaarVergelijker.be you can compare up to three recognised estate agents from your municipality free of charge and without obligation.