Flemish Region: Stricter regime for the transfer of family businesses
In collaboration with Deloitte Legal - Lawyers
Since 1 January 2026, new rules apply to the donation or inheritance of family businesses in the Flemish Region. The good news is that the regime is largely unchanged. Shares can still be donated without gift tax or inherited at 3% inheritance tax (in direct line or between partners) or 7% (for others).
What is changing?
The most important change concerns residential real estate. Real estate that is primarily intended for residential use, and building land held by the family business are no longer subject to the favorable regime. This real estate is taxed at standard rates: either a gift tax of 3% (in direct line or between partners) or 7% (between others), or in inheritance tax at progressive rates up to 27% (in direct line or between partners), or even up to 55% for others.
The exclusion also applies to real estate in (grand)daughter companies in which the family company participates for at least 10%. The exclusion also applies to foreign residential real estate.
But there is an exception
If your business has a real estate activity (e.g. real estate rental) that generates at least 75% of your turnover, you can still benefit from the regime. However, the exception only applies on the condition that the family business employs at least one full-time employee both before and after the transfer (for 3 years).
This sounds simple, but in practice it can be more complex. For businesses that not only rent residential properties, but also have offices or other activities, it can be difficult to meet this 75% threshold. Moreover, this calculation must be made individually for each company, not for the entire group at the group level.
New administrative requirements
As of 1 January 2026, every transfer requires a mandatory valuation report drawn up by a business auditor (who is not the statutory auditor) or a certified accountant. This report must, among other things, determine the value of the shares and indicate how much of it is attributable to real estate. This report is always required, even if no residential real estate is held by the family group. Note that strict timing requirements apply to the report.
Furthermore, you can request a "prior certificate" from the Flemish Tax Authority regarding the valuation report. This certificate confirms that your valuation is correct and that you meet all conditions. It provides absolute certainty before you complete the transfer.
What can you do?
- Inventory your real estate: Which residential properties and land does your company own?
- Calculate your turnover percentage: What percentage of your turnover comes from real estate activities?
- Consider aligning the structure with the new rules if you do not meet the 75% threshold.
- Seek professional advice: A professional is essential for drafting the valuation report at the right time. Furthermore, our experts can guide you through the transfer of your family business, including applying for the favorable regime and, optionally, obtaining a prior certificate.
- Pay attention to timing: The deadlines are tight. Make sure everything can be submitted on time.
Conclusion
These new rules require preparation and professional advice. It is important to take action in time and not wait until the moment of transfer.
