Why the Increasing Construction Tax Demands Early‑Stage Strategy
In Brussels, the construction tax applicable to residential projects has risen from approximately €0.55/m² to €4.10/m², an increase of roughly 645%. For non-residential projects, the rate has moved from about €5.78/m² to €12.30/m², an increase exceeding 100%, as of tax year 2025.
This increase is merely the tip of the iceberg. It signals a growing importance of the construction tax, which exists in every municipality in the Brussels Region. Each municipality fully exercises its fiscal autonomy: with its own taxable base (built surface or built volume), differing rates (based on different destinations) and exemptions.
Taxpayer and taxable event
This one-time tax is triggered by the urban planning permit itself: construction, reconstruction, extension, demolition, transformation, change of use and regularization all fall within its scope. The taxpayer is the beneficiary of the permit (a long-term leaseholder, or even a tenant in whose name the permit is issued), and not necessarily the full owner.
Exemptions are not automatic
The exemption categories vary from one commune to another but recur in similar forms across the Region: works carried out by public housing operators, by non-profit operators for worship, education or healthcare purposes, and temporary or provisional structures. Some communes extend relief to energy-efficiency works, listed monuments or disaster reconstruction, but these categories are not universal and should be verified commune by commune rather than assumed.
Construction Tax Assessment: Deadlines matter
A claim against a construction tax assessment must be filed, in writing and reasoned, within three months of the third working day following dispatch of the tax bill.
Further widening the residential and non-residential property tax gap
To illustrate as of 2025 for a 10,000 m² office conversion in the City of Brussels, the tax is approximately € 123,000 (and € 41,000 for the same residential conversion). On top of that, there is an annual municipal office tax of € 240,000 and an annual regional tax on non-residential surfaces of € 102,000, both taxes are not levied on residential property.
The increasing construction tax is yet another (not negligible) add-on in the already enormous total property tax burden for office buildings. Also, the differing rates depending on the destination (residential or non-residential) further widen the existing gap between the overall property taxation for office buildings compared to residential buildings. Construction tax is no longer a footnote
The scale of the increase adopted by the City of Brussels indicates that the construction tax can no longer be treated as just a footnote once a permit is granted. The tax is clearly establishing itself as an additional one‑time levy that developers must factor into their financial modelling when assessing their development projects.
The differing approaches adopted by the nineteen Brussels municipalities require a case-by-case analysis. While also creating various opportunities in the application of the tax, particularly regarding its scope, reductions, and exemptions.
Our team continues to closely monitor developments and remains available to help you identify opportunities and navigate the differing approaches adopted across the Brussels municipalities for your real estate portfolio.
