Renting Part of Your Home to Your Company: How Should You Determine the Rent?

Many company directors carry out part of their professional activities from home, whether in a dedicated office, meeting room, archive space, or workspace. In such situations, renting part of your private residence to your company can be an attractive tax-planning strategy.

This arrangement can improve the director’s overall remuneration package while reducing the overall tax and social security burden. However, the rent cannot be determined arbitrarily.

Why rent part of your home to your company?

When a company pays rent to its director for the professional use of part of a property, the income is generally taxed as real estate income rather than professional income.

This offers several advantages:

• no social security contributions on the rental income;
• eligibility for a 40% lump-sum expense deduction (within legal limits);
• the rent is tax-deductible for the company;
• a better balance between professional and property income.

For many business owners, this can be more advantageous than receiving additional salary.

The limit you should not exceed

Belgian tax legislation includes an anti-abuse provision.

If the rent paid by the company is considered excessive, the amount exceeding the legal ceiling is automatically reclassified as director’s remuneration. This excess amount then becomes subject to personal income tax, withholding tax, and social security contributions.

The maximum allowable rent is calculated as follows:

Non-indexed cadastral income × revaluation coefficient × 5/3

For the 2026 tax year, the revaluation coefficient is 5.75.

A practical example

Assume:

• cadastral income of the property: €2,000
• professional use: 25%

The professional portion of the cadastral income is therefore:

€2,000 × 25% = €500

The maximum annual rent that can be charged is:

€500 × 5.75 × 5/3 = €4,792

Or approximately €399 per month.

Any amount above this threshold may be reclassified as director’s remuneration.

Determining the professional-use percentage

One of the most important aspects is accurately determining the part of the property used for business purposes.

This percentage may be based on:

• the floor area used professionally;
• the number of rooms dedicated to business activities;
• an objective and properly documented calculation.

An excessive professional-use percentage could be challenged during a tax audit.

Should a lease agreement be drafted?

Absolutely.

Even when renting to your own company, a written lease agreement is strongly recommended. It should clearly specify:

• the areas being rented;
• the professional-use percentage applied;
• the rental amount;
• payment arrangements;
• the allocation of costs and expenses.

Proper documentation helps justify the tax deduction for the company and reduces the risk of disputes with the tax authorities.

Renting part of your private residence to your company remains one of the most popular tax optimisation techniques for SME directors.

However, the optimal rental amount depends on numerous factors, including the cadastral income, the professional-use percentage, ownership structure, director’s remuneration and overall tax situation.

Before determining or adjusting a rental amount, it is advisable to perform a detailed calculation. This ensures you benefit from the available tax advantages while avoiding any risk of reclassification.

A well-structured arrangement can generate substantial tax savings over time.