Do you pay capital gains tax when selling your house during a divorce?

In a divorce, the family home often takes centre stage. The good news is that this home is treated favourably for tax purposes. In Belgium, the sale of your own home, the place where you actually lived, is exempt from capital gains tax. This exemption applies even if you sell within five years of purchase, which often happens in a divorce.

The reason is simple. The legislator does not want people to pay tax on the sale of the roof over their heads. That is exactly what the family home is about. As long as the home was your main residence, the profit you make on the sale remains untaxed.

The exemption for your own home is not automatic. You must be able to prove that you actually lived there. The rule used by notaries and the tax authorities is that you must have effectively lived in the home for an uninterrupted period of at least twelve months, of which at least six months within the period of twelve months before the sale.

You can usually prove this easily with your official registration at that address, supplemented by, for example, your energy consumption. In a normal divorce situation, where you lived together in the home for years, this condition is almost always met.

Watch out for a practical pitfall. If one of the partners moved out long before the sale and registered elsewhere, the situation for that person can be more complex. Discuss this in time, especially if the sale takes place months after the actual breakup.

Not every home is a family home. If you sell a second home, a rented apartment, or an investment property during the divorce, it does not fall under the exemption for your own home. For built real estate, the following applies:

• If you sell the property within five years of purchase, the capital gain is generally taxed at 16.5 percent, plus municipal surcharges.
• If you sell after five years, the capital gain is exempt.
• For building land, different time limits and rates apply, with a higher percentage for a quick sale.

Property that you received through an inheritance is not subject to this capital gains tax upon a later sale, regardless of how quickly you sell. This can be relevant when an inherited home is part of the assets to be divided.

When tax does apply, not the entire difference between purchase and sale is taxed. The capital gain is the difference between the selling price and the purchase price, where you may add certain costs to the purchase price. Think of the acquisition costs such as registration fees and notary fees, and renovations carried out.

The rules also allow a fixed increase in certain cases for the years you were the owner. This calculation is technical and depends on your exact situation. This is precisely where an accountant or tax advisor makes the difference, because a correct cost basis lowers the taxable capital gain.

The capital gains tax on real estate is a federal tax and works in principle the same in Flanders, Wallonia, and Brussels. The exemption for your own home and the rates for second homes therefore apply in the same way across the country.

Where the regions do differ is in other costs related to selling a home, such as registration tax upon purchase. That is separate from capital gains tax, but it can play a role in the overall picture of your divorce. For the specific figures in your region, it is best to ask your notary for advice.

A divorce is emotionally heavy, and the tax side adds to it. Yet it pays to clarify a few things in advance:

• Check whether the home was your main residence and whether the occupancy condition is met.
• Gather proof of residence, such as official registration and consumption data.
• Identify which properties are still part of the assets to be divided and whether capital gains tax applies to them.
• Have your personal situation confirmed by your notary, lawyer, or accountant, especially if multiple properties or a second home are involved.

This guide gives you a clear picture of the rules, but it is not legal or tax advice. Every divorce is different, and only a professional who knows your file can assess your situation exactly.