Optimal returns when structuring your real estate portfolio
One of the real estate terms of 2025 will undoubtedly be "affordable housing." The urgent need for affordable housing is a pressing reality in Belgium. It is therefore not surprising that residential rental property platforms are increasingly emerging. Institutional parties such as Immobel, Home Invest, Inclusio, ION, Yally, etc., have already established appropriate real estate SPVs*. However, we notice that more and more tenants are also finding solutions with family-professional structures and the associated platforms. The professionalisation of the residential real estate market thus seems to continue further in 2025, increasingly outside the private sphere.
Institutionalisation of the rental market
The increasingly stringent and complex rental and renovation regulations are putting pressure on the rental market for private landlords. A professional approach, where rental conditions, maintenance, and management are further optimised thanks to the scale advantages of a larger structure, is becoming increasingly important. Additionally, the likely increasing fiscal pressure on private rental income will be the extra push towards corporate structures. These structures will hopefully bring more stability and certainty to the residential rental volume, where sustainability and energy efficiency are crucial. These latter conditions are essential not only for the annual rental income but also for realising future capital gains in a potential exit scenario.
Structuring a real estate company in Belgium requires careful consideration of financial, fiscal, and legal aspects. A well-thought-out approach can contribute to stable and sustainable growth in the residential real estate market, where both landlords and tenants benefit from the advantages of a professional and efficient market.
Drivers of a profitable structure
When investing in real estate, there are several strategic choices you need to make. How you set up your financing, fiscal, and legal structures can determine your success. Here are some important considerations:
Financial Structure
A proper mix of equity (contribution & capital), loans, and hybrid financing (quasi-capital) is essential for the stability of your project. Hybrid financing offers more flexibility than traditional bank credits, for example. Do you choose regular bank loans or bullet financing where the principal is paid at the end of the term? Hybrid structures offer an intermediate solution.
Fiscal Structure
The project can be structured within a classic company with a normal tax regime. Depending on certain criteria and conditions, you can opt for a structure with a favourable tax regime (GVBF, private Privak, etc.) that facilitates a beneficial return. The deductibility of interest differs for natural persons, legal entities, and partnerships, which can significantly impact the tax burden.
Legal Structure
Consider whether you use one SPV* per project or structure multiple projects within one company, depending on the scale and complexity of your investments.
A well-thought-out structure in financing, taxation, and legal aspects is crucial for the success of your real estate investments. Choose the right combination for optimal returns and reduced risk.
(*) SPV = Special Purpose Vehicle or Specific Project Company
