New rules for family businesses from 2026: what will change?
December 2025 - From January 1, 2026, an important change will come into effect in Flanders for family companies. The Flemish government is adjusting the favorable regime for gift and inheritance tax: residential real estate and building land will be completely excluded. The measure is part of the Program Decree that was approved in principle in October 2025.
Residential real estate no longer subject to favorable tax regime
Today, shares in family companies can be gifted or inherited at a favorable tax rate under certain conditions, with a gift tax rate of 0% or an inheritance tax rate of 3%/7%. From 2026, this advantage will disappear for the value of real estate intended for residential use, including land.
The exclusion applies not only to real estate held directly by the company, but also to real estate held indirectly through subsidiaries with at least a 10% stake.
It is noteworthy that the exclusion is applied without nuance. Residential real estate used in a professional context is also excluded from the favorable regime.
No more test for ‘real economic activity’
Until now, a family company had to demonstrate that it was engaged in economic activity. That criterion is being abolished. The concept of real economic activity is being removed from the law, which means that only the nature of the assets will determine whether or not the favorable regime applies.
Mandatory valuation and certificate from Vlabel
In order to determine which part of the shares relates to residential real estate, a report from a company auditor or certified accountant must be added to the file. In addition, it is possible to request a certificate of valuation from the Flemish Tax Administration (Vlabel):
· This certificate is valid for 60 days for gift tax purposes.
· For inheritance tax, the certificate may be binding.
Continuity condition
After a gift, the capital or contribution of the company may not decrease due to distributions during the first three years. If this condition is violated, gift or inheritance tax will still be levied on the proportional share of the shares that fell under the favorable regime.
Other changes to inheritance tax
The Program Decree also contains other measures: inheritance by friends is abolished, single people without children receive a tax reduction on the first €100,000, and the exemption for the surviving partner will gradually increase to €125,000 by 2028.
Take timely action
Entrepreneurs with a family business would be wise to review their succession planning before January 1, 2026. Any gift made before that date will still be subject to the current – more favorable – regime.
