Few structures survive the decades as well as split ownership. The principle takes one sentence to state and a specialist to execute. Poorly calibrated, it turns a wealth advantage into a tax reassessment. Here is what a Belgian director should verify before committing the company to it.
Split ownership separates the usufruct (use and income) from the bare ownership (the substance of the asset). In the classic structure, the company buys the temporary usufruct of a building and the director the bare ownership; on expiry, full ownership reconstitutes in the director's hands at no extra cost. Since 1 September 2021, article 3.141 of the Civil Code allows a usufruct of up to 99 years, including for a legal entity. The whole balance rests on an objective valuation of the usufruct — failing which, articles 26 and 32 of the Belgian Income Tax Code apply.
The appeal is real. Extracting cash from a company is expensive, and holding a professional building directly inside the company raises the question of its eventual exit. Split ownership offers a third way. But every stated advantage comes with a condition, and every condition with a possible audit. This is a specialist's file, not a brochure product.
Split ownership: what exactly are we talking about
The ownership of an asset can be divided into two distinct rights. The usufruct confers the use of the asset and the right to its fruits — occupying the building, letting it, collecting the rent. The bare ownership confers title to the substance without immediate enjoyment: the bare owner becomes full owner on the expiry of the usufruct, by operation of law alone.
Book 3 of the Civil Code, introduced by the law of 4 February 2020 and in force since 1 September 2021, rewrote this area. The most notable change for company structures concerns duration: article 3.141 of the Civil Code now sets a maximum usufruct term of 99 years, drawing no distinction between natural persons and legal entities. The former Civil Code capped usufruct granted to a company at thirty years — a limit inherited from Roman law, matching the average length of a generation. That cap has gone, widening the range of possible arrangements.
The "company-usufructuary" structure: mechanics and tax rationale
In the most common configuration, a company acquires the usufruct of a building for a fixed term while the director — or a third party, often a family member — acquires the bare ownership. Each finances the portion of value corresponding to their right.
On the company's side, the usufruct acquired is a depreciable asset: the company writes off its acquisition value over the term of the usufruct and deducts ordinary maintenance costs and the interest on any financing, within the conditions of article 49 of the Belgian Income Tax Code. On the bare owner's side, the operation is elegant in wealth terms: on expiry of the usufruct, they recover full ownership without registration duties or tax on the reconstitution, by accession. The asset "rises" to them, enhanced by everything the company will have maintained.
It is precisely this apparent free reconstitution that draws the authorities' attention. The structure is not unlawful — in principle it is entirely accepted — but it is only advantageous if every parameter is defensible. The first of these is valuation.
Valuing the usufruct: the real breaking point
For years, uncertainty prevailed. The Income Tax Code set no valuation criterion, and some directors valued the usufruct deliberately high — to maximise the share paid by the company and minimise the share paid privately for the bare ownership. The logic is mechanical: the dearer the usufruct, the cheaper the bare ownership, and the more cheaply the bare owner acquires an asset that will revert to them in full.
The Belgian Ruling Commission has shifted its position. It no longer accepts the flat-rate formula of article 47 of the Registration Duties Code (4% of the asset's value multiplied by an age coefficient), which applies to the levy of duties but often overstates the economic usufruct. The preferred method is now a financial approach, based on discounting the net income the usufructuary can realistically expect over the term. Each transaction must rest on a reasoned, property-specific valuation report.
If the company pays for the usufruct above its economic value, the excess can be reclassified in two ways: as a taxable benefit in kind for the director (article 32 of the Belgian Income Tax Code), or as an abnormal or gratuitous advantage granted by the company (article 26 of the Code), disallowed from its expenses. The Court of Cassation confirmed, notably in a judgment of 21 June 2019, that these usufruct/bare-ownership structures are assessed on their economic reality, not on their contractual packaging alone.
Private use, expiry and works: the other audit angles
Valuation is not the only ground for reclassification. Three further points call for particular vigilance.
First, private use. If the director occupies privately, in whole or in part, a building whose usufruct is held by their company, that free provision generates a taxable benefit in kind in their hands (article 32 of the Belgian Income Tax Code). The structure therefore assumes a genuine professional use of the asset, or the correct valuation of the benefit where a private component exists.
Next, the deductibility of expenses. The deduction of depreciation, costs and interest at company level is only secured if the expenditure meets the conditions of article 49 of the Belgian Income Tax Code — that is, if it is incurred to acquire or retain taxable income. Case law has evolved since the Court of Cassation judgment of 12 December 2003, but the authorities still require a genuine link between the expense and the company's activity.
The new Civil Code clarifies the allocation of major repairs between usufructuary and bare owner. Where the company finances, during the usufruct, works or improvements that exceed its maintenance obligation and that will benefit the bare owner free of charge on expiry, the authorities may treat this as a taxable benefit (article 32 of the Belgian Income Tax Code). The usufruct agreement must allocate the burden of works clearly, and that allocation must be respected in practice.
Split purchase between natural persons: a different logic
Alongside the company structure sits a purely wealth-planning variant, often confused with it: the split purchase. The parents acquire the usufruct of an asset, the children the bare ownership, usually financed by a prior gift. On the usufruct's expiry at the parents' death, the children become full owners — in principle without inheritance tax on the asset.
This scheme is framed by an anti-abuse presumption. Article 9 of the Inheritance Tax Code (for Brussels and Wallonia) and article 2.7.1.0.7 of the Flemish Tax Code (for Flanders) presume that an asset acquired in usufruct by the deceased and in bare ownership by a third party is held in full ownership in the estate, and therefore taxable to inheritance tax — unless the contrary is proven. The conditions for rebutting this presumption vary by region and have shifted with successive administrative positions; the operation only holds if the financing and the chronology are impeccably documented.
Real-estate split ownership is a tool, not a wealth architecture in itself. It concentrates wealth in a single illiquid, heavily framed asset. A balanced allocation keeps, alongside bricks and mortar, tangible movable assets with a different tax logic — including art as an asset class, outside the scope of the capital-gains tax and decoupled from the property cycle. Diversification remains the best protection against concentration risk.
Deciding with full knowledge
Real-estate usufruct through a company is neither a miracle niche nor a trap to avoid on principle. It is a technical instrument whose effectiveness depends entirely on execution: a defensible valuation, genuine professional use, a clear agreement on works, and documentation that withstands an audit. Together, these conditions turn an ordinary structure into a solid one. Missing, they turn the hoped-for saving into a reassessment, with interest on top.
Before committing your company to split ownership, an initial confidential meeting makes it possible to set out the right figures and identify the weak points — not to sell a structure, but to check whether it holds for your situation.