Commercial or residential rental contract: What expenses can you deduct?

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When you are self-employed in Belgium, you may incur rental costs for buildings, offices, workspaces,... you use in your activity, but whether these costs are deductible depends strongly on what type of rental contract you have, and how the premises are used (dedicated office, shared with private use, etc.).
Broadly speaking one distinguishes:

• A commercial lease / rental contract (for business premises, wholly for professional use)

• A normal residential rental contract (for living accommodation or a home-office overlap)

The taxonomy matters because the tax-authority treats them differently: how the contract describes the use, whether the landlord declares the income as commercial/business income rather than residential, and how much of the space is professional vs private.

1. Commercial rental contract

1.1. When a contract is clearly for business premises

If you rent a dedicated workspace (office, business premises) under a contract that clearly states business use, then you are on safe ground. If you rent a dedicated workspace, separate from your home, the process is straightforward. In this case, you can treat the rent as a fully deductible business expense. As proof, you’ll need the contract, invoices, bank payments, etc.

1.2. Deductible expenses beyond rent

When you operate your business from commercially rented premises, most professional expenses related to the space are fully deductible, as the premises are used exclusively for business purposes.

Utilities: water, gas, electricity, heating

All utility costs linked to the commercial premises can be fully deducted. Keeping invoices and proof is still required.

Internet, telephone, software, equipment

• Internet and telephone: the full cost is deductible since the contract relates to professional premises.

• Software and office equipment: laptops, screens, desks, ergonomic chairs, and similar items are all fully deductible when used for professional purposes. Also items such as lamps, plants, waiting-room furniture, decorations, or anything that enhances the professional workspace are also fully deductible.

• Insurance for equipment: fully deductible.

2. Residential rental contract

2.1. When you rent part of your home (home-office)

Things get more complex when you use part of your home (that you rent) for work. In that case key questions are: does the contract allow professional use? What share of the surface is used for professional vs private? The tax-authority expects clarity.

This means, if you rent your home, you CANNOT deduct your rent unless a portion of it is designated for professional use, and this is stipulated in your rental agreement. This is because the landlord will be taxed differently on that portion of the income.

In practical terms:

• The lease/rental contract must explicitly state the portion of the premises which is used for professional activity and the portion for private/living use.

• You can only deduct the portion of the rent that corresponds to the professional use.

• If the contract or registration is not properly done, you may be denied the deduction and might trigger audit risk.

2.2. Deductible expenses beyond rent

For self-employed persons working from home, expenses must be deducted proportionally to the professional use of the space.

Utilities: water, gas, electricity, heating

You may deduct utility expenses in proportion to the surface area allocated to your home office. Example: if the office represents 15% of your home’s total area, you may deduct 15% of utilities.

Internet, telephone, software, equipment

• Internet: deductible according to the percentage of business use.
  Example: 5 working days out of 7 → 5/7 deductible.

• Office furniture and equipment: deductible if used for professional purposes (laptop, screen, desk, ergonomic chair). Other items that support the home office (lamps, plants, small furniture) are also deductible to the extent they serve the professional workspace.

• Insurance for equipment: deductible in proportion to professional use.

3. How to encode your rent in Accountable

If you pay the rent for the private and professional parts of the property together, specify the separate amounts in the communication of your bank transfer. Once this is done, download the monthly payment record and upload it under the category “Workspace → Rent” for the amount of professional use.
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This type of expense is exempt from VAT, so select 0% VAT with the reason “This item is exempt from VAT."
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For a commercial rental contract, you can simply encode the monthly payment record in the same way as described above.

4. Key practical rules

• Document clearly: Contract must show what portion is professional use, the professional part of the rent, etc.

• Surface area ratio: When part of home is used for business, calculate (sqm for business ÷ total sqm) to apply to costs. The tax authorities may inspect.

• Registration obligations: Since 2024 (for 2023 income) there is a new annex (form 270 MLH) to complete when deducting rental costs. See this link for more information.

• Landlord’s tax consequences: If your deduction triggers a shift from residential to business rental income for the landlord, this may cause resistance. Always check the contract clause.

• Avoid audit risk: If you claim a large deduction for professional use of residential premises without solid documentation, it may attract tax-authority scrutiny.

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Author - Valesca Wilms

As content marketing lead at Accountable Belgium, Valesca writes about freelancing, self-employment, and taxes based on her own experience as a freelancer.

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