Adaptation of tax concession regime for family partnerships: residential property excluded from 2026 onwards

On Oct. 3, 2025, the Flemish government approved a preliminary draft decree that significantly tightens the favorability regime for gifts and inheritances from family businesses and corporations.

What does the tax favor system entail?

The tax favor system provides a reduced inheritance tax rate and a gift tax exemption For the transfer of family businesses and companies within the family.

The thrust of the planned reform

Residential property and building lots are excluded. Only "real business assets" are still eligible for the favored regime. This applies to family enterprises as well as shares in family companies:

• For family businesses (such as an agricultural, liberal profession, craft, trade or manufacturing business), the criterion 'mainly' when assessing residential real estate. Henceforth, any property (or portion thereof) that belongs to habitation is used or earmarked, excluded of the favorability regime, regardless of the proportion of occupancy. Also building land explicitly fall under the term residential property. Even a small portion used for residential purposes is enough to completely exclude it.
• For shares of family companies The favored regime is only applied On the portion of the equity value not corresponding to residential real estate (in the company itself or in subsidiaries from 10% participation).

Mandatory valuation report

A independent auditor or certified accountant must prepare a report that clearly breaks down the residential property. This report is required only in the case of donation or inheritance of shares in family companies.

• Donations: the report must be prepared before the deed and submitted to VLABEL within 7 days of registration.
• Inheritances: the report is attached to the estate declaration.

Certificates: advance certainty, binding on inheritance tax

At donations you can request an attestation in advance from VLABEL that confirms whether the terms is met and which valuation valid. This attestation is binding as long as the facts do not change between application and deed (principle of reliance).

At inheritance tax you can request an attestation about the valuation at date of death, based on the report. This attestation is final binding for VLABEL.

Transitional

For gifts of shares in family companies notarized between January 1 and March 31, 2026 an additional period of 60 days To submit the mandatory valuation report.

Are you considering a gift of stock or corporate assets?

For family businesses (such as an agricultural, liberal profession, craft, trade or manufacturing business) is residential real estate already excluded. The change provides a stricter assessment: any (part of a) property used for residential purposes is excluded.

For shares in family companies a lot will change from Jan. 1, 2026: residential property and building lots in the partnership will then fall outside the favored regime. Want to take full advantage of the current regime? Then consider a gift before Jan. 1, 2026. Afterwards, the procedure becomes stricter and residential property is no longer under the favored regime.