On 3 October 2025, the Flemish Government gave preliminary approval to a draft decree that will bring substantial changes to the preferential tax regime for family businesses, particularly affecting those with residential real estate assets. These reforms are set to take effect on 1 January 2026 and will exclude residential real estate and building land from the favourable tax treatment currently provided on gifts and inheritances.
Under the new rules, only the active portion of family businesses will be eligible for reduced tax rates, while the real estate components will be taxed at regular rates. This shift aims to realign tax benefits with the core mission of supporting active family businesses and preventing “improper use” of the preferential regime.
In accordance with the updated regulations, every gratuitous transfer of shares in a family business, whether by gift or inheritance, will require a report from a certified accountant or auditor. This report will need to detail the value of the residential real estate within the company or its subsidiaries, ensuring transparency in how real estate values influence the overall valuation of the family business.
For family business owners with residential real estate, this is a crucial time to evaluate your company’s structure and explore strategic options. Early preparation is key to navigating the new requirements effectively.
