Back to the home page

Transfer of shares in a property holding company with the TREVI network

Property holding companies remain a widely used vehicle in Belgium for acquiring, managing and passing on real estate assets. Often employed in the context of family wealth management, these structures provide a flexible framework for transferring or selling an entire property portfolio without the need to dispose of the underlying assets individually. However, their tax treatment has become less favourable over time, notably due to a liquidation bonus that may reach 30%. In this context, whether to sell the properties or transfer the shares is a strategic decision, with each option presenting its own advantages and key considerations.

In practice, holding real estate through a company entails managing not only the assets themselves, but also a range of accounting, tax and succession-related constraints. Rental income generated by a property held within a company is treated as corporate income and is therefore subject to corporate income tax. Over time, the property is depreciated in the accounts and, upon disposal, may give rise to a capital gain, which is likewise taxable at the corporate level. These factors directly impact the value of the shares and, consequently, the transfer price.
The TREVI network has established its TREVI PATRIMONIAL department. Its mission is clear: to support owners in identifying the right buyer for their property holding company and in determining the appropriate transfer price. A common source of confusion lies in the distinction between the value of a real estate asset and the value of the shares of the company that owns it. This distinction is, however, essential in transactions of this nature.
It should also be borne in mind that the amounts available after taxation remain an integral part of the company’s assets. If a director wishes to benefit from them, those funds must be distributed through the available channels: salary, dividends, directors’ fees, full liquidation, and so on. The most commonly used method is the distribution of dividends, which is itself subject to taxation via withholding tax. This represents an additional cost that must be factored into the final calculation.
In 2023, the applicable corporate income tax rate (CIT) stood at 29% (more precisely 29.58%, or 20.40% under the reduced rate subject to certain conditions), while withholding tax was set at 30%. These are significant amounts and by no means negligible.
This is why directors of real estate companies looking to dispose of their assets primarily seek a buyer for the entire shareholding rather than a purchaser of the underlying real estate assets themselves.
This type of transaction is more complex than a traditional real estate sale, as it involves non-standardised real estate, accounting, tax and legal considerations. Only a limited number of professionals fully master all of these aspects. It is within this context that the TREVI PATRIMONIAL department of the TREVI network operates, relying on a team specialised exclusively in this type of transaction in order to provide clients with tailored, high-level support.

Looking to sell or buy a patrimonial company?

Ask your questions to one of our specialists.

Contact us

Looking to buy or sell a property holding company?

The sale or acquisition of a property holding company requires thorough preparation. This involves a precise valuation of the assets, a detailed analysis of the legal and tax structure, and the preparation of a comprehensive file to meet the expectations of a well-informed buyer. The Belgian market has its own specificities and calls for a high level of expertise.
Our advisors can guide you through this process and help you define the strategy best suited to your situation.

Simplified process for the transfer of shares in a company

  1. Valuation of real estate assets to determine their true market value
  2. Pricing of the company’s shares, taking into account its debts and cash positions
  3. Preparation of the presentation file: signing of an engagement letter, collection of available documents, administrative searches, photographic report, as well as financial statements and property descriptions.
  4. Presentation of the dossier and marketing to the full range of investors within our client network.
  5. Viewings of the real estate assets held by the company.
  6. Negotiation of received offers and expressions of interest.
  7. Reaching an agreement between buyer and seller through an accepted Letter of Intent.
  8. Due diligence : support for both parties through the technical, accounting and tax audit of the company.
  9. Drafting of the transfer agreements and the minutes of the general meeting
  10. Pre-closing revisions : adjustment of the final share price based on the company’s most recent financial position as of the closing date.
  11. Closing : signing of the transfer before the notary and implementation of any guarantees

Duration and key stages of the transfer transaction

All of these steps typically take between 6 and 9 months on average. Each stage requires a high level of rigour to ensure the share transfer is completed under the best possible conditions. The valuation and preparation of the file is often the most time-consuming phase and may take more than six weeks.

Marketing, viewings and negotiations then take place over several weeks. The notarial completion brings the process to a close. It goes without saying that professionalism and the quality of the stakeholders involved are essential in this type of transaction.Over the years, the TREVI network PATRIMONIAL department has developed unique expertise in this field, supported by numerous completed transactions, a professional team, a network of specialised external partners, and a database of active Belgian and international investors focused on this type of deal.

FAQ

  • How does the transfer of shares in a real estate company work in practice ?

    A share transfer consists of transferring ownership of the shares to a new investor. This transaction requires the shareholders’ agreement and often the drafting of a notarial deed. In some companies, the articles of association require the prior approval of the other shareholders.
    This transfer makes it possible to acquire all the rights attached to the company, in particular those relating to the properties it owns, without going through a traditional real estate sale. It can also help avoid certain taxes associated with the transfer of real estate ownership.

  • Transfer and registration of shares: where and how is this done in Belgium ?

    The transfer of shares must be recorded in writing, generally before a notary. Depending on the legal form of the company, the transfer may be recorded in a register of securities movements.
    Registration with the tax administration is mandatory and gives rise to registration duties that vary depending on the region and the nature of the shares transferred. These formalities are essential to ensure the validity of the transfer.

  • The tax consequences to know in the event of a transfer or liquidation

    The sale of shares in a real estate company often leads to taxation on the liquidation surplus, which can rise to 30%. This levy is added to the corporate income tax already paid on income and capital gains.
    Taxation depends on the holding period, the legal form of the company and the way the funds are distributed. Analysing these parameters helps avoid unpleasant surprises.

  • Why wait 5 years before transferring the shares of a real estate company ?

    A five-year holding horizon is often recommended in order to benefit from more favourable taxation. Below this threshold, taxation may be higher, particularly on realised capital gains.
    This rule aims to avoid short-term speculative transactions and to favour sustainable investments. Respecting this period can make a significant difference to the final tax burden.

  • Transfer of shares in a real estate company free of charge: modalities and conditions

    The free transfer, through gift or inheritance, of shares in a real estate company is subject to specific rules. In particular, the valuation formalities must be respected and the transaction must be declared to the tax authorities.
    Depending on the region, these transfers may benefit from exemptions or specific tax regimes, but they remain subject to conditions that must be properly understood.

  • Accounting procedure for recording the transfer of shares

    From an accounting perspective, the transfer of shares must be recorded in the register of share movements and reflected in the company’s accounts. The transaction may result in a change in equity.
    An accountant generally intervenes to validate the entries and ensure that the transaction complies with the applicable standards.