Legal context — Art. 32 §2 ITC 92: When a company director rents a property to their own company, the portion of rent that exceeds 5/3 of the non-indexed cadastral income × revaluation coefficient is automatically requalified as director's remuneration. This requalification leads to heavier taxation (personal income tax + social contributions) on the excess amount. This simulator helps you identify the excess and optimise your situation.
⚙️ Simulation parameters
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Property
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Property ownership
Rental contract
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📋 Analysis results
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Revalued NCI
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Permitted ceiling
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5/3 × indexed NCI
Net rent received
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Rent - charges
Amount requalified
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Excess over ceiling
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Director's PIT information
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💡 Recommendations
📚 Understanding the requalification rule
Article 32, paragraph 2 of the Income Tax Code 1992 provides that when a company director rents a property to their own company, the portion of rent exceeding 5/3 of the non-indexed cadastral income × revaluation coefficient is automatically requalified as director's remuneration. This anti-abuse mechanism aims to prevent directors from receiving income as rent (less taxed) rather than as remuneration.
The non-indexed cadastral income (NCI) appears on your tax assessment notice. For the requalification rule of Art. 32 §2 ITC 92, it is multiplied by a revaluation coefficient set annually by SPF Finance — distinct from the indexation coefficient used for ordinary personal income tax. The ceiling is then calculated as NCI × revaluation coeff. × 5/3.
Official coefficientss : 2027 : 5,75 · 2026 : 5,63 · 2025 : 5,46 · 2024 : 5,37 · 2023 : 4,86 · 2022 : 4,63 · 2021 : 4,60.
Official coefficientss : 2027 : 5,75 · 2026 : 5,63 · 2025 : 5,46 · 2024 : 5,37 · 2023 : 4,86 · 2022 : 4,63 · 2021 : 4,60.
The requalified portion is taxed as director's remuneration under personal income tax, not as real estate income. This entails: (1) application of the marginal PIT rate (up to 50%), (2) director's social contributions (~20.5%), (3) possible professional withholding tax, (4) in case of tax audit: fines and late interest. The company, for its part, can only deduct the non-requalified portion as a professional expense.
Several strategies are possible: (1) Reduce the rent below the 5/3 revalued NCI ceiling, (2) Reassess the NCI if undervalued (procedure with SPF Finance), (3) Rent only the professional part of the property (office, etc.) and calculate the ceiling on that part only, (4) Sell the property to the company to avoid renting, (5) Consult an accountant to find the most suitable structure for your situation.
Yes. Requalification also applies when the property is held by the director's spouse, legal cohabiting partner, or minor children who occupy the family home. The tax administration may consider that the director is the real economic beneficiary of the rental, even if the property is formally in the name of a family member.
In the case of furnished rental, the rent must be split into two parts: the real estate part (the bare property) and the movable part (furniture and equipment). Only the real estate part is subject to the requalification rule of Art. 32 §2 ITC 92 and compared to the 5/3 indexed NCI ceiling.
The movable part is taxed as movable income at the liberatory withholding tax rate of 30% — often more advantageous than the marginal PIT rate.
Practical allocation: The breakdown must be realistic and justifiable (detailed furniture inventory, market value, etc.). The tax administration may challenge an excessive movable share. In practice, the 60/40 rule is commonly applied: 60% allocated to the real property, 40% to furniture and equipment.
The movable part is taxed as movable income at the liberatory withholding tax rate of 30% — often more advantageous than the marginal PIT rate.
Practical allocation: The breakdown must be realistic and justifiable (detailed furniture inventory, market value, etc.). The tax administration may challenge an excessive movable share. In practice, the 60/40 rule is commonly applied: 60% allocated to the real property, 40% to furniture and equipment.
When the property is held jointly between the director and their spouse, only the director's share is subject to the rule of Article 32 §2 ITC 92. The spouse's share, where the spouse is not a director in the company, is taxed as ordinary real estate income, without requalification risk.
Example: If the property is held 50/50 and the total rent is €20,000/year, only the €10,000 attributable to the director is compared to the ceiling. This can allow the admissible rent to be doubled without exceeding the limit.
Warning: if the spouse is also a director in the same company, both shares will be subject to the rule, nullifying the advantage of joint ownership.
Example: If the property is held 50/50 and the total rent is €20,000/year, only the €10,000 attributable to the director is compared to the ceiling. This can allow the admissible rent to be doubled without exceeding the limit.
Warning: if the spouse is also a director in the same company, both shares will be subject to the rule, nullifying the advantage of joint ownership.
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