What does your free habitation cost you?

Do you receive from your company as director (or employee) free habitation? If so, then you know this is considered as a taxable benefit in kind. As from 1 January 2012 the formula to  calculate the amount of the benefit in kind has changed. Living on the expenses of your company therefore becomes a lot more expensive. Also the lump sum amounts for free heating and electricity are amended.

Free disposal of a house

To calculate the value of the benefit in kind, several elements are of importance:

is the house put at the disposal by a private individual or by a legal person (in most cases a company);

is the cadastral income of the house higher or lower than 745€

is the house used solely for private purposes, or is part of it used professionally.

House put at the disposal by a private individual

The benefit is calculated as follows:

100/60 of the indexed cadastral income of the building;

100/90 of the indexed cadastral income of the land.

House put at the disposal by a legal person

The benefit is calculated as follows:

the non-indexed cadastral amount is lower than or equals 745€: 100/60 of the indexed cadastral income x 1,25;

the non-indexed cadastral income is higher than 745€: 100/60 of the indexed cadastral income x 3,8

This is the main difference compared to the previous regime; until 2011 the indexed cadastral income was multiplied by 2. Note that the coefficient's increase to 3,8 will lead to doubling the value of the benefit in kind.

When the house is partly used for professional purposes, this can be taken into account for the calculation of the benefit in kind.

The cadastral income of a house is in principle fixed. The indexation coefficient is calculated and published annually: for this income year it amounts to 1,6349 (this is tax year 2013). For 2011 the indexation coefficient was 1,5790.

Example

An example can explain everything. You are a director and you receive free habitation from your company since several years. The non-indexed cadastral income of the house is 2.500€.

In 2011 this would have cost you:

Full private use

Indexed cadastral income x 100/60 x 2 = 2.500 x 1,5790 x 100/60 x 2 = 13.158,33

Partly professional use

Imagine that the house was used for 25% for professional purposes, then the amount can be multiplied with 75% (you will only be taxed on the private part of the house).

13.158,33 x 75% = 9.868,75

What will it cost you in 2012:

Full private use

Indexed cadastral income x 100/60 x 3,8 = 2.500 x 1,6349 x 100/60 x 3,8 = 25.885,92

Partly professional use

When the house is still used for 25% for professional purposes, the amount can be multiplied by 75% (you will only be taxed on the private part of the house).

25.885,92 x 75% = 19.414,44

Heating and electricity

The benefit in kind for free heating and electricity is estimated as a lump sum amount. These lump sum amounts differ based on the beneficiary: directors, managers or others. Managers meaning persons responsible for the daily management and authorized to represent and legally bind the employer, together with their direct reports in case they also perform daily management.

The amounts hereafter are the indexed amounts for this income year:

Heating

management: 1.820€

others: 820€

Electricity

management: 910€

others: 410€

Vestigingen
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