A Silent Expropriation: Why Belgium Must Abolish Its Inheritance Tax for Everyone
Belgium, known for its high quality of life and strong social services, also carries one of the most punitive inheritance tax systems in Europe. With rates that can reach up to 27% for close family and as high as 55–80% for more distant relatives, this tax does more than collect revenue — it quietly erodes family wealth, disincentivizes saving, and drives capital and people out of the country.
It’s time for a clear and decisive move: the full abolition of inheritance tax for everyone — not just the privileged few who can afford smart accountants.
💸 How Much Wealth Is Leaving Belgium?
According to recent statistics from Statbel and studies by Belgian financial analysts:
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Each year, over 10,000 Belgians aged 55+ change their fiscal residency to countries like Portugal, Switzerland, Luxembourg, France, and the Netherlands.
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In 2022 alone, an estimated €13.5 billion in private wealth left Belgium due to inheritance tax planning and fiscal migration.
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Many of these individuals take their pensions, investments, and entrepreneurial spirit with them — a net loss for the Belgian economy.
This is not just retirement tourism. This is strategic capital flight.
⚖️ An Unequal System: Entrepreneurs Pay Less, Citizens Pay More
The Flemish “family business exemption” allows shares of companies to be transferred to children at 0% gift tax (or 3% upon death), under certain conditions. This sounds fair until you realize:
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Regular citizens with a home and some savings pay 27% inheritance tax, while families with clever legal structures pass on millions tax-free.
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If a small landlord owns three apartments in his name, his children will pay a fortune in taxes. If the same properties are held through a BV (company), and structured “correctly,” they might pay nothing.
This legal asymmetry fuels resentment and undermines public trust in fairness.
🏠 Inheritance Tax = Forced Sale of Family Property
For middle-class families, inheritance tax often means:
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Selling the family home to pay the tax bill.
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Dividing farmland or small businesses.
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Breaking up intergenerational savings.
These are not billionaires — these are working families who paid income tax, VAT, and property tax for decades, only to be taxed again when passing their legacy to their children.
📉 Economic Impact: Penalizing Productivity and Savings
Inheritance tax punishes:
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Families who save rather than consume;
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Entrepreneurs who build capital instead of spending it;
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Parents who want to help their children without burdening them.
It reduces long-term family capital accumulation, weakens social mobility, and discourages building for the future. In a society already facing demographic aging, every euro of stable, productive capital matters.
🌍 Global Context: Other Countries Have Abolished It
Belgium is out of sync with much of the developed world:
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Austria, Sweden, Norway, Portugal, Czech Republic, New Zealand, and Canada have no inheritance tax.
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These countries concluded that the tax is inefficient, unfair, and discouraging to economic activity — especially when it brings in less than 1% of total government revenue.
So why does Belgium still cling to it?
✅ What Should Be Done?
Belgium must completely abolish the inheritance tax for all citizens — not just entrepreneurs or those with the resources to exploit legal loopholes.
This would:
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Encourage families to build and retain wealth;
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Keep older Belgians (and their capital) in the country;
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Restore fairness to a system now seen as deeply hypocritical;
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Align Belgium with modern, forward-looking tax policy.
🧭 Conclusion: Tax Justice Is Not Tax Punishment
Inheritance tax, as it stands today, is a quiet form of expropriation. It punishes the careful, the savers, and the builders — and rewards those who leave or restructure. If Belgium truly believes in fairness, productivity, and long-term growth, it should do what other smart nations have done:
Let families pass on their legacy — without penalty, without bureaucracy, and without fear.
In light of the recent article published by VRT NWS on August 29, 2024, titled "Privévastgoed schenken aan nultarief moet Vlaamse gunstregeling voor familiebedrijven herbekeken worden," there has been significant public discourse regarding the Flemish tax scheme that allows for the transfer of private real estate at a zero percent gift tax rate.
The article highlights that in 2024, 1,670 Flemish residents utilized this scheme, transferring assets worth €7.35 billion without incurring gift taxes. Originally designed to facilitate the succession of family businesses, this tax benefit is now under scrutiny for its broader application, particularly concerning the inclusion of private real estate not directly tied to business operations.
Overview of the Flemish Tax Scheme:
The Flemish tax regulation permits the transfer of shares in family-owned companies to descendants under favorable tax conditions:
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0% gift tax when shares are transferred during the owner's lifetime.
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3% inheritance tax if shares are transferred upon the owner's death.
To qualify, the company must meet specific criteria, including being a genuine family business and maintaining operations for at least three years post-transfer.
Controversy and Legal Interpretations:
Critics argue that the scheme's current application extends beyond its original intent. Instances have emerged where private real estate, held within company structures, is transferred tax-free, raising concerns about potential misuse. Legal interpretations have, in some cases, favored entrepreneurs, allowing such transfers even when the assets are not directly linked to active business activities.
Legal Structuring for Compliance:
To ensure adherence to the scheme's requirements and mitigate potential legal challenges, the following steps are recommended:
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Establish a Family Company (BV/NV): Form a legitimate business entity under Belgian law, ensuring that ownership remains within the family.
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Acquire Real Estate Through the Company: Purchase properties under the company's name, ensuring that these assets are integrated into the company's operations.
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Demonstrate Economic Activity: The company should engage in genuine business activities, such as property rental or management, to qualify as an active enterprise.
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Maintain Operations Post-Transfer: The company must continue its business activities for a minimum of three years following the transfer to benefit from the tax advantages.
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Comprehensive Documentation: Maintain detailed records of all transactions, business activities, and legal opinions to substantiate the company's operations and compliance with tax regulations.