In early December 2024, the Walloon Parliament passed a decree introducing revisions to inheritance and real estate donation tax legislation. While certain provisions came into force as early as January 1, 2025, others are scheduled to take effect on January 1, 2028. These changes are set to reshape the fiscal landscape in Wallonia, offering potential benefits for both heirs and donors alike.
Immediate Impact : Effective January 1, 2025
One of the most notable changes pertains to the treatment of inheritance taxes on movable assets located abroad. Under the current system, inheritance taxes are levied by the region where the deceased resided for the majority of the five years prior to death. This results in taxation on the deceased’s worldwide assets, which can lead to double taxation — once in Belgium and again in the country where the asset is located, such as foreign bank accounts.
From January 1, 2025, the Walloon decree will allow inheritance taxes paid abroad on movable assets to be deducted from the Belgian inheritance taxes due on the same assets (Article 17 of the Inheritance Tax Code). This change brings much-needed relief for individuals with cross-border assets. A similar deduction for foreign taxes is already in place for real estate situated abroad.
Looking Ahead : Effective January 1, 2028 (In Principle)
The decree also foresees a substantial reduction in the inheritance tax rates and real estate donation tax rates, set to take effect in 2028. These reductions will result in significant tax savings for both direct and collateral heirs, as well as for anyone making real estate donations.
In terms of inheritance taxes, the key changes are as follows (marginal tax rates):
- A reduction from 30% to 15% for direct heirs, spouses and legal cohabitants;
- A reduction from 65% to 33% for collateral heirs (siblings);
- A reduction from 70% to 35% for collateral heirs (aunts, uncles, nieces and nephews);
- A reduction from 80% to 40% for all other individuals.
In addition, the marginal tax rates on donations of Belgian real estate will similarly decrease:
- A reduction from 27% to 14% for direct heirs, spouses and legal cohabitants;
- A reduction from 40% to 20% for all other individuals.
These reductions, however, hinge on the current legislative framework remaining unchanged. If fully implemented, they would substantially ease the tax burden on inheritance and real estate donations, making them more financially advantageous for those involved.
In Summary
Although some provisions of this new decree are not expected to come into effect until 2028, the overall thrust of the changes indicates a more favourable fiscal environment for heirs and donors alike. By reducing the tax rates, these measures could offer considerable savings and improve estate planning strategies in Wallonia — assuming no further legislative adjustments are made before or after 2028.
We will continue to monitor these developments closely and provide updates as the implementation dates approach.
Sources:
Written by: Juliette Michaux, Actalys, Brussels (Belgium)
