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The Walloon Government has decided to abolish the property tax exemption applicable to industrial machinery and equipment. As from the 2026 tax year, investments made between 2006 and 2020 will once again be fully subject to property tax, resulting in a sometimes significant increase in the tax burden for industrial companies established in Wallonia.
CONTEXT
As a reminder, certain equipment, machinery and other installations used in an industrial, commercial or artisanal activity must be included in the calculation base of the immovable withholding tax1.
Since 2005, as part of the Marshall Plan, the Walloon Region had granted property tax exemption for investments made in machinery and equipment. These assets were therefore excluded from the property tax taxable base, allowing industrial companies to significantly reduce their annual tax burden.
At the end of December 2025, the Walloon Government decided to put an end to this exemption regime, considering that its cost had become unsustainable in the context of severe budgetary constraints.
SCOPE OF THE MEASURE
The reform introduces a distinction depending on the period during which the investments were made:
- Investments made between 1 January 2006 and 31 December 2020
The exemption is abolished. These assets will be fully subject to property tax as from the 2026 tax year.
- Investments made between 1 January 2021 and 31 December 2025
The exemption is maintained but limited to five tax years.
For example, investments made during the year 2025 will still be able to benefit from the exemption from property tax for the tax years 2026, 2027, 2028, 2029, and 2030. As from 1 January 2031, these investments will be subject to property tax.
- Investments made as from 1 January 2026
A temporary exemption remains possible, also limited to five tax years.
For example, if you plan to invest in equipment and/or tools during the year 2026, you will be able to benefit from the exemption from property tax until 31 December 2031. As from 1 January 2032, that same equipment and tools will be subject to property tax.
IMPACT FOR WALLON COMPANIES
The financial consequences of this measure may be particularly significant for industrial companies:
- Significant increase, or even doubling, of the property tax component relating to machinery and equipment.
- Structural increase in fixed costs, independent of any new investment.
- Risk of a negative impact on investment or modernization projects, or on the sustainability of certain industrial sites.
HOW CAN WE HELP YOU?
RSMB can assist affected companies, in particular, with:
- Precisely quantifying the financial impact of the abolition of the exemption.
- Verifying the correct qualification and cadastral valuation of machinery and equipment.
- Identifying potential optimization opportunities or tax risk mitigation strategies.
- Assisting companies in their discussions or procedures with the competent authorities.
For any questions regarding the above matters, please do not hesitate to contact the RSM Belgium Tax team (tax@rsmbelgium.be).
RSM Belgium Tax
[1] Equipment and machinery regarded as “immovable property by destination” for the purposes of immovable withholding tax are taken into account only if they are permanently fixed to the land or used on a permanent basis for the operation. This includes, in particular, equipment which, due to its weight, size, method of installation or operation, is intended to remain in place and to be used permanently at the location where it is installed.
