A heavy fiscal blow for buy-to-let landlords: the Act of 11 December 2025 simply removes the mortgage interest deduction for investment properties, with retroactive effect from 1 January 2025. Representative landlord associations have brought a constitutional challenge on five solid grounds; hundreds of landlords have signalled interest in collective action. What you need to know for your next tax return — and how to protect yourself.
What is the removed mortgage interest deduction?
The removal of the mortgage interest deduction is one of the heaviest fiscal measures affecting private landlords adopted in Belgium in several years. Article 14 of the Income Tax Code (CIR 92) allowed landlords to deduct the interest on loans taken out "to acquire or retain rental income." That provision has been abolished by the Act containing miscellaneous provisions of 11 December 2025, published in the Belgian Official Gazette on 30 December 2025.
The measure applies to all immovable property other than the owner's own home: rental units, investment properties, and commercial premises. Any landlord who has taken out a mortgage to acquire a buy-to-let property is directly affected.
Why the retroactive effect is the central problem
A measure effective from 1 January 2025
The removal takes effect from 1 January 2025 — before the law was even published, which happened on 30 December 2025. Landlords who signed a mortgage and drew up their financial plans relying on this deductibility find new rules applied to a year that had already run its course entirely.
This undermines a fundamental legal principle: the non-retroactivity of fiscal legislation. Under Belgian law, a retroactive fiscal provision is not automatically unconstitutional, but it requires sufficient justification linked to exceptional circumstances. The legislature provided none in the preparatory works for the Act.
No transitional provisions
Making matters worse, the Act provides no transitional provisions for existing mortgages. Unlike other fiscal reforms that maintained old regimes for existing contracts (such as the abolition of the housing bonus in Wallonia), the removal of the interest deduction applies immediately and without distinction.
The Council of State, in its advisory opinion on the Act, had itself criticised this absence of transitional provisions. The fact that the government maintained the measure despite that opinion constitutes one of the key arguments in the constitutional challenge.
The five grounds of the constitutional challenge
The applicants have referred the matter to the Constitutional Court. The five grounds invoked are as follows.
1. Retroactive effect without exceptional circumstances
The Constitutional Court only admits retroactive legislation when compelling grounds of general interest justify it. Here, no particular urgency was put forward to justify retroactivity to 1 January 2025. A government's mere budgetary intention does not constitute an exceptional circumstance within the meaning of constitutional case law.
2. Absence of transitional provisions criticised by the Council of State
As noted above, the absence of transitional provisions was explicitly flagged by the Council of State in its advisory opinion. Maintaining a measure against such a clear opinion constitutes a legal vulnerability that the applicants intend to exploit before the Court.
3. Absence of prior notice to affected landlords
No prior notice was published in the Official Gazette to inform landlords of the forthcoming changes. Fiscal transparency — the principle of legal certainty — requires that taxpayers be able to anticipate regime changes and adapt their decisions accordingly. This principle was violated.
4. Discrimination between natural persons and companies
Commercial companies that hold buy-to-let properties can still deduct their borrowing costs as business expenses — the measure does not affect them. Individual landlords therefore find themselves in a significantly more disadvantaged position, without objective justification. This is discrimination within the meaning of Articles 10 and 11 of the Constitution.
5. Discrimination affecting landlords taxed on actual rents
Landlords whose properties are let to companies, embassies, or for commercial use are taxed on actual rents (rather than on the indexed cadastral income increased by 40%). These landlords had a direct practical interest in the interest deduction, far greater than ordinary residential landlords. Their identical treatment constitutes an additional discrimination.
What changes for your 2025 tax return (to be filed by June 2026)
The boxes that disappear
The income tax return to be filed before 30 June 2026 (income year 2025) will no longer contain boxes 1146-18 and 2146-85, which corresponded to interest on debts taken out to acquire or retain immovable property generating taxable rental income.
In concrete terms, if you had been deducting EUR 4,000 of interest per year on your investment property, those EUR 4,000 will now be added to your tax base. Depending on your marginal tax rate (50% for higher incomes), this could represent an additional annual tax cost of EUR 2,000 — for a single property.
Should you file an objection?
Landlords who have lost this deduction would be well advised to file an objection with the FPS Finance — provided their situation falls within ordinary management of a private estate (rather than a professional property management activity). An objection does not suspend payment of the tax, but it preserves rights pending a possible favourable decision from the Constitutional Court.
The objection procedure is distinct from the collective constitutional challenge: the two approaches are complementary and not mutually exclusive.
Collective action and professional advice
Landlord associations have organised support for a collective challenge before the Constitutional Court. For possible participation or for the individual objection procedure with the FPS Finance, contact a tax adviser or lawyer specialising in property taxation.
Impact on the profitability of buy-to-let investments
A calculation that changes fundamentally
To illustrate the impact, consider a concrete example: a landlord owns a buy-to-let property acquired with a EUR 250,000 mortgage at 3% (that is, EUR 7,500 of annual interest in year one). Previously, those EUR 7,500 were deductible from rental income. They no longer are.
If this landlord is in the 50% marginal bracket (income above approximately EUR 46,000), the additional tax cost is EUR 3,750 per year. Over 20 years of repayments, this represents a potential additional tax cost of several tens of thousands of euros — for a single property.
Adaptation strategies
Faced with this situation, several approaches are being considered by tax specialists:
- Accelerated capital repayment to reduce the outstanding balance and therefore the non-deductible interest — but this requires significant liquidity
- Incorporation for future investments — a company can still deduct its financing costs as business expenses, but transferring an existing estate involves costs and an immediate tax charge
- Progressive disposal of the least profitable properties in the portfolio to reduce the overall tax burden
None of these strategies is cost-free or fiscally neutral. Individual tax advice is essential before any decision.
What property managers should do
- Identify the properties in the portfolio affected by the removal (buy-to-let properties with an outstanding mortgage)
- Calculate the tax impact for each affected landlord, property by property
- Inform landlord clients about individual objections and strategy options with their tax adviser or lawyer
- Prepare the files: gather amortisation tables, tax assessment notices, and objection history by property
- Monitor the progress of the constitutional challenge — the Constitutional Court typically takes 6 to 12 months to rule
Seido tip: keep a complete record of your mortgages, tax assessment notices, and fiscal objections. With Seido, every document is centralised by property and timestamped — a structured file to support your objection or legal file. Organise your documents →
This article is part of Property Essentials #3 — March 2026. Also read: New Brussels government: what the DPR changes for landlords — Behavioural taxes on property.
Sources and references
- Act containing miscellaneous provisions of 11 December 2025 — fiscal measures, RSM Belgium
- End of interest deduction for multi-property landlords from 2025, ComptaTeam
- Personal income tax developments for landlords from 2025, Baker Tilly
- Analysis by Olivier de Clippele and Patrick Willems, Le Cri no. 502, March 2026, pp. 8–9