Update on first set of individual tax measures – be ready for your 2025 tax return

On December 30, 2025, the Law containing various measures dated December 18, 2025, was published in the Belgian Official Gazette to implement a first set of individual income tax measures outlined in the coalition agreement. This Alert focuses on the general individual tax measures, other than the changes to the special tax regime for inbound taxpayers or the introduction of the capital gain tax. For those topics we refer to our specific alerts: Retrospective changes to the Belgian tax regime for inbound taxpayers, No changes for social security to Belgian expatriate tax regime and New Belgian Capital Gains tax: Implications for expatriates.
 

Real Estate

One of the measures to reduce the budget deficit is the elimination of the possibility to deduct interest paid on loans for properties other than the primary residence from real estate income, even for existing debts.

To simplify and streamline the different regimes, the federal deduction for interest, the reduction for the federal housing bonus, the federal home savings, as well as the reduction related to loans for green loans will no longer be applicable. As a result, for the capital repayments of a mortgage loan for properties other than the primary residence and the premiums for a life insurance policy linked to that loan, individuals will only be able to rely on the long-term savings reduction (at a rate of 30% and for a maximum annual amount of € 2,450 for income year 2025), if the conditions are met.

Effective Date: Tax year 2026 (income year 2025)
 

Flexi-jobs

Until income year 2024 remuneration obtained from a flexi-job employment contract was exempt from income taxes, up to a maximum of € 12,000 per taxable period for non-retired employees (non-indexable).  Under the Law containing various measures, the ceiling will be increased to € 18,000 for income year 2025 and will be annually indexed.

Effective Date: Tax year 2026 (income year 2025)
 

Alimony payments

Previously, alimony payments were 80% deductible from the total net taxable income of the payer when calculating income tax. At the same time, 80% of the alimony payments were taxable in the hands of the beneficiary.

The government has now decided to gradually limit the deduction of alimony payments.  For payments made or awarded from January 1, 2025, and insofar the taxable period ending after December 30, 2025, only 70% of the payments would be deductible from the net taxable income of the payer. This percentage will further decrease to 60% for payments made from January 1, 2026, and to 50% for payments made from January 1, 2027. This deduction will also apply when determining the taxable portion of the payments for the recipient.

Additionally, it is proposed that alimony payments made or awarded to a person who is not a resident of a member state of the EEA will no longer be tax deductible. On the other hand, these alimony payments will also no longer be taxable for the recipients. This measure will enter into force on December 31, 2025, and will apply to taxable periods ending after that date, i.e. as of income year 2026.

Effective Date: Tax year 2026 (income year 2025)
 

Income children at charge

Previously, children were fiscally dependent if their income did not exceed a specified amount, depending on the parent's living arrangement. The Law containing various measures raises this amount for all children to €12,000 (indexed amount for income year 2025).

The amount is uniform for all taxpayers. Higher amounts for a dependent disabled child are no longer applicable, and no exceptions apply for single parents.

Additionally, individuals receiving a living wage or a PhD scholarship in Belgium will be excluded from being considered dependents for income tax purposes.

Effective Date: Tax year 2026 (income year 2025)
 

Indexation of tax reductions

The indexation of various tax reductions is frozen until the income year 2029, based on the indexed amounts applicable for the income year 2024. This freeze applies to:

• First bracket of income from savings deposits, dividends, interests with social purpose, loans through crowdfunding platform;
• Threshold for long-term saving reduction;
• Purchase of employer’s shares;
• Tax reduction for donations;
• Private pension savings. For private pension savings, the amounts will continue to be indexed for income year 2025 to ensure that any excess is not carried forward to income year 2026. Accordingly, the freeze on pension savings will take effect as of income year 2026.

The law also stipulates that the exemption amount for reimbursements for commuting using alternative transportation will not be indexed for income year 2025. This will constitute a one-time non-indexation measure. Finally, it is decided to permanently freeze the maximum amount of the tax credit for dependents at € 550 per child.

Effective Date: Tax year 2026 (income year 2025)
 

Simplification of the tax return

To simplify the tax return process, the government proposes to eliminate several tax benefits and exemptions that are rarely utilized. Specifically, the following benefits and exemptions are abolished as of income year 2025, unless specified differently:

• Exemption for employer contributions towards the purchase price of a computer (PC private plan). This measure is applicable as of October 1^st, 2025;
• Additional lump sum deduction for long-distance travel;
• Tax reduction for capital loss on a private Privak;
• Tax reduction for expenses related to the acquisition of an electric vehicle;
• Tax reduction for expenses related to a development fund;
• Tax reduction for wages paid to a domestic employee;
• Tax reduction for expenses incurred in the context of an adoption procedure;
• Tax reduction for premiums for legal assistance insurance;
• Tax reduction for expenses related to the installation of a charging station;
• With respect to sole proprietorship: different exemptions are abolished such as the capital gain on business vehicles realized as of September 1^st, 2025, for social liabilities, etc.

Additionally, the percentage of tax reduction for donations will decrease from 45% to 30%, also effective from the tax year 2026.