Rich expats enjoy Belgian good life

Of all the expatriate communities living in Belgium, the French probably have it better than most - after all, how much of a hardship can it be to live in a foreign country which speaks your language and where the difference in lifestyle compared to back home is negligible.

There are an estimated 160,000 French people living in Belgium, the biggest foreign community after the Italians, the majority of them concentrated in Brussels and its environs. In the past few years their numbers have been swelled by tax-exiles trying to avoid having their assets depleted by the French wealth tax. This is an annual tax on assets of more than €750,000 which no longer has an upper limit and is collected over and above income tax, capital gains, inheritance and social security.

As far as the average employee in this country is concerned, Belgium as a tax haven would seem to be a contradiction in terms - the majority of office workers hand over at least 60% of their wages in federal income tax, local tax and social security and that’s before 21% value-added-tax on everything they want to buy and all the stealth taxes that eat away at the rest of what is left of anyone’s disposable incomes. But it is an attractive environment for wealthy Parisians who want to hold on to their fortunes. The Belgian rentier economy hardly taxes income from property and tends not to tax existing wealth, even if taxes on wages are high. The absence of capital gains tax makes Belgium look even better, with Paris only 80 minutes away by high-speed train if they want to go back for the weekend.

If they stay here Friday through Monday, the wealthy French gravitate towards the smart designer shops in the Avenue Louise and the fashionable restaurants, cafés and brasseries of the Sablon. But they tend to want to live in the posh bits of Avenue Louise and the up-market suburbs of Ixelles and Uccle, where more than half of the property priced at a million euros or more is bought by people who are not Belgian.

An average rise in house prices of 10% a year over the past five or six years according to Damien Herinckx of Home for You, a personal home hunting service (www.hfy.be), means that property is double the price today compared to what it cost in the late 1990s. Yet, says Herinckx, the cost of houses and apartments in Brussels is still much cheaper than in Paris and this is a gap that will not disappear even if Belgian prices begin to level out. He says the French choice of Uccle and Ixelles is dictated by relative ease of access to the Gare du Midi and the Paris TGV as well as the location of the Lycée français, whereas the Anglophones congregate in Woluwe and Wezembeek because it is easier to get to the airport and closer to the British school.

The Dutch have also found that they will hand over less of their fortune to the tax authorities if they relocate to Belgium and also have the advantage of already being able to speak the language, Flemish in this case. They tend to go for the suburbs of Antwerp with the Netherlands just a short drive away. And whereas Belgians prefer to live in spacious houses, the Dutch feel at home in the tiny houses typical of Ghent and are reported to be buying them up the minute they come on the market.

The word is spreading to Germany and the UK that Belgium is a good place to hang on to your money if you have already made it, with the added bonus of being able to pick up a spacious and stylish place to live for a fraction of what it would cost back home.

But the downside to Belgium’s property boom, fuelled by the foreign invasion, is that a whole generation of young Belgians who will be obliged to pay the full whack of taxes on their wages will probably never be able to afford to buy their own home without a financial windfall from a wealthy relative or the miracle of a winning line on the lottery.

• Patricia Kelly is a freelance journalist based in Brussels.

Of all the expatriate communities living in Belgium, the French probably have it better than most - after all, how much of a hardship can it be to live in a foreign country which speaks your language and where the difference in lifestyle compared to back home is negligible.