Belgian Real Estate Investment Trust (B-REIT)

A regulated real estate company in Belgium ('Gereglementeerde vastgoedvennootschap' / 'Société immobilière réglementée') is similar to a Real Estate Investment Trust in the USA and is regulated by the Law of 12 May 2014.

Investment properties are:

  • properties or real rights on properties
  • shares of real estate investment companies
  • option rights on real estate, eclusive or jointly controlled by the Belgian REIT
  • shares of public or institutional Belgian REITs provided that controle is shared or exclusive
  • real estate certificates
  • rights arising from contracts resulting from property leasing

The aim of the legislator is that a Belgian REIT should ensure maximum transparency in its real estate investments and maximum cash-flow dividends.

A Belgian REIT is subject to specific regulations. The most notable are:

  • liabilities are restricted to 65% of total assets
  • quarterly valuation of the property asset by an independent real estate expert
  • a minimum distribution of 80% of its current cash-flow as dividend
  • risk diversification: max. 20% of total assets invested in a single property complex
  • exemption from corporate taxes
  • deduction of a liberating withholding tax of 30% when the dividend is paid

The intention of all these rules is to reduce risk. Companies that merge with a Belgian REIT are subject to a tax of 15% on the latent increase in value and tax-free reserves, the so-called “exit tax”.