German resident renting out Belgian property: tax on 2025 income
German resident with Belgian rental income? Cadastral income can determine Belgian tax. Explore the 2025 interest deduction change and 2026 filing rules.
A German tax resident renting out a Belgian home can face Belgian non-resident income tax based on cadastral income rather than the rent received. The loss of the federal interest deduction from income year 2025 can also create a filing obligation, depending on individual circumstances.
Figures below are illustrative; the Belgian calculation concerns income year 2025, assessment year 2026.
Which country can tax the rental income?
Consider a German resident who owns a Belgian apartment and rents it to an individual exclusively for private residential use. The Belgium–Germany tax treaty allows Belgium to tax income from immovable property located there.
The Belgian charge is non-resident income tax. This is separate from the regional property tax, known as précompte immobilier or onroerende voorheffing. Paying the regional tax does not, by itself, settle the non-resident income tax position.
Germany's treatment must be considered separately under the treaty and German domestic law.
Why cadastral income matters more than the rent
For a built property rented to an individual who does not use it professionally, the Belgian taxable property income is generally:
Non-indexed cadastral income × annual indexation coefficient × 1.40.
The 40% increase is part of the statutory calculation. It is not a deduction for the owner's actual expenses.
For income year 2025, the indexation coefficient is 2.2446. In the return, the owner declares the relevant non-indexed cadastral income, rather than entering the calculated taxable base or the actual residential rent. The correct field should be checked against the non-resident return's explanatory notes.
The cadastral income to report depends on ownership rights and the period concerned. The example below assumes full ownership throughout the year and exclusively private residential letting.
An illustrative calculation for income year 2025
Assume a non-indexed cadastral income of €1,200:
Indexation: €1,200 × 2.2446 = €2,693.52 before administrative rounding.
Statutory increase: €2,693.52 × 1.40 = approximately €3,771.
Amount entered as cadastral income in the return: €1,200, subject to the form's instructions.
The approximately €3,771 is a taxable base, not the tax bill. The final tax depends on the taxpayer's non-resident category, other relevant income and eligibility for personal reliefs. A bespoke tax estimate should not be transferred unchanged to another landlord.
What changed for mortgage interest?
The federal ordinary interest deduction for property other than the taxpayer's own home was abolished from assessment year 2026, covering income year 2025. The change also affects existing loans.
Consequently, qualifying mortgage interest that could reduce property income under the earlier rules no longer reduces that base for 2025. A landlord may therefore have a higher taxable amount even though the rent and loan payments have barely changed.
Capital repayments are a different issue: they are not an expense deducted from this cadastral income calculation. Any separate loan-related tax reduction requires its own eligibility review, including the rules applying to non-residents. A bank certificate alone does not establish entitlement.
Why a non-resident return may now be required
For the limited case of a non-resident whose only relevant Belgian income is rental property income, the €2,500 filing threshold matters. It must be assessed using the relevant tax measure of property income, not simply the annual rent received.
In the illustrative example, approximately €3,771 is above that threshold. The abolition of the interest deduction can bring a landlord above it even where deductible interest previously kept the relevant amount below the threshold.
Other Belgian-source income can change this analysis. Do not assume that every owner below the threshold is exempt from filing, or that a return requested by the administration can be ignored.
Earlier years require their own calculation using the rules, coefficients and eligible interest for those years. The 2025 change does not establish either that all previous returns were required or that none were required.
Which costs do not reduce this taxable base?
Under the private residential letting regime, actual building-management charges, reserve-fund contributions, maintenance and replacement equipment are not individually deducted from the cadastral taxable base.
A property can therefore generate little or no cash surplus while still producing taxable property income. Mortgage repayments and maintenance affect cash flow; the Belgian calculation follows a different measure.
Regional property tax remains a separate charge. It is not automatically credited against the non-resident income tax.
What changes if the tenant uses the property professionally?
The cadastral calculation depends on the tenant's use of the property. Professional or mixed use can lead to a different taxable base involving actual rent and rental benefits.
Check both the lease and the actual use. A residential label should not replace a review of the facts, and a change of tenant can justify a fresh tax assessment.
How does Germany treat the Belgian rental income?
For the ordinary private rental situation described here, the treaty provides for exemption in Germany. Although treaty-exempt income can normally affect the rate on other German income, section 32b(1), sentence 2, number 3 EStG excludes qualifying rental income from property in another EU state from that progression mechanism.
This can mean that the Belgian rental income neither attracts German income tax nor increases the rate on other German income. Corresponding rental losses cannot simply be used to reduce German taxable income.
This framework is not a blanket confirmation that an individual's past German returns are complete. Belgian bank interest, for example, is a different income category and needs a separate review.
Filing deadline and records
The Belgian non-resident return for income year 2025 / assessment year 2026 is due by 20 November 2026.
Prepare the cadastral-income details, ownership information, lease and relevant residence documents. Retain historical loan certificates if earlier years need to be examined.
Where access is difficult, official identification routes or an authorised representative may be relevant. Arrange this early rather than assuming an extension will be available.
Frequently asked questions
Do I declare the rent received or the cadastral income?
For the private residential letting described here, declare the relevant non-indexed cadastral income. Professional use can change the method.
Does an old mortgage still qualify for the ordinary interest deduction in 2025?
No. The abolition from assessment year 2026 also affects existing loans for property other than the taxpayer's own home.
Can a replacement boiler reduce the Belgian taxable amount?
Not as an individually deductible actual expense under this cadastral-income regime. Its cost can reduce the property's cash return without reducing this taxable base.
Does paying Belgian regional property tax mean there is nothing else to file?
No. Regional property tax and non-resident income tax are separate, and a non-resident return may still be required.
Must I correct all earlier Belgian and German returns?
That cannot be decided from the 2025 calculation alone. Review each country's rules, the income categories and the evidence for each relevant year.
Sources
Belgium–Germany double tax treaty, Articles 6 and 23.
Circular 2026/C/2 on federal property taxation from assessment year 2026.
Vlaanderen.be — access to government services for non-Belgians.
This article explains a general framework and is not personalised tax advice. Rules change yearly, and the tax treatment depends on the exact situation.
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