B-Sreif | KPMG | BE

Belgian Specialized Real Estate Investment Fund (B-Sreif) – A preview


The Belgian government is expected to introduce a new fund-vehicle, the Belgian Specialized Real Estate Investment Fund (B-Sreif), that aims at real estate investments and is open for institutional investors.


Director, Real Estate

KPMG in Belgium


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1) Ratio legis and expected legal framework

The Sreif aims to fulfill the desire of institutional investors for a more flexible and tax efficient vehicle for investing in real estate in Belgium and abroad while acquiring control over their investment.

The existing Belgian real estate investment funds with a beneficial tax regime are lacking flexibility: the “SICAFI” and the “Sociétés immobilières réglementées generally need to be listed on the stock exchange and envisage a long term investment policy.

The Sreif, on the other hand, would not require any listing at the stock exchange, would be accessible for a limited amount of investors, and could be set up for a limited amount of assets, while benefiting a similar beneficial tax regime as the SICAFI and the sociétés immobilières réglementées.

Furthermore, a foreign real estate fund with real estate in Belgium cannot benefit, to date, from the beneficial tax regime of the SICAFI and the Sociétés Immobilières réglementées. The introduction of Sreif would make it possible that the beneficial tax regime of the foreign real estate fund with real estate in Belgium becomes recognized in Belgium. This enhances a non-discriminatory policy compliant with EU law.

The vehicle is expected to be introduced as one of the investment platforms governed by the Act of April 19th, 2014, implementing the Directive 2011/61/EU on Alternative Investment Fund Managers into Belgian legislation.


2) Current outlook

Based on currently available information the Sreif promises to offer an interesting tool for investments in real estate and affiliated products. Some planning, e.g. at the level of real estate transfer taxes (“RETT”), however seems required to avoid drawbacks.

3) Expected Strengths

- The Sreif has a flexible regulatory framework. 

- The daily operations are organized in a way similar to common law companies.

- No specific authorizations would be required in the hands of the Sreif. The manager of the Sreif however may be subject to a strict prudential control.

- The Sreif benefits from a special tax treatment:

  • The rental income and capital gains realized following the sale of assets by the Sreif would not be subject to Belgian corporate income tax. The Sreif would benefit from a “lump sum” taxable basis, consisting exclusively of i) received benevolent or abnormal advantages, ii) disallowed expenses other than capital losses on shares and iii) the secret commissions tax. (article 185bis Belgian Income Tax Code)
  • The distributions from income sourced outside of Belgium would benefit from a specific exemption of Belgian withholding taxes. Moreover, existing exemptions from withholding taxes, such as e.g. exemptions for distributions to non-resident investors or for the distribution of liquidation bonuses by investment companies, may also apply.


4) Possible weaknesses

  • Limitation in time: The Sreif could have a duration of maximum of 10 years extendable with 5 years. After 15 years, the duration could again be extended by 5 years, and so on. This would however require unanimity between the different shareholders.

Distributions received from Sreif would not benefit from the dividends received deduction (“DRD”) unless the dividends generate from:

  • Income of foreign real estate (that was subject to corporate income tax in their state);
  • ‘good’ dividends that qualify themselves for the ‘DRD’; or
  • dividends from Sicafi or Sociétés Immobilières réglementées if the dividends generated from the income described under (i) or (ii).


5) Potential opportunities

  • A large scope of possible investments are expected to be allowed: direct real estate, participations in (regulated or foreign) real estate companies, or funds and financial derivatives.
  • There is no diversification of investments-obligation.
  • The Sreif could hold liquidities up to 10% of its assets base. This means that a limited “indirect” distribution-requirement exist. (although latest rumors indicate that a 80% distribution requirement may be applicable).
  • There is a possibility to create compartments within the Sreif.
  • There is no minimum amount of investors required.
  • The beneficial tax regime of foreign real estate fund could be recognized in Belgium provided that the fund subscribes with the Belgian tax authorities (SPF Finances) and pays an “Exit tax” of 16,995%. 


6) Potential threats

  • The access to a Sreif is limited to qualifying institutional investors e.g. large corporations, credit institutions, investment-companies, financial institutions, insurance-companies, pension-funds and their managers. The definition of qualifying investors is thus expected to be broad.
  • An “Exit tax” of 16,995% is due upon setting up of the vehicle and in case of contribution of an asset into the Sreif.
  • A practical consequence of the Sreif-structure may be that disposals of real estate need to be structured as asset deals on which RETT is due.

Examples of situations where Sreif could be an interesting tool

  • The Sreif may allow for operational corporations with real estate holdings to unlock (part of) the value of their real estate without losing control over the assets.
  • The Sreif could be considered as hub for pan European real estate portfolios.

  • The Sreif could be considered as a vehicle to tax efficiently structure privately held real estate portfolios.



Part of the above information, namely the Royal Decree implementing the B-Sreif, is preliminary, has yet to be finalized and may therefore still (materially) change.

The present should therefore be considered as a mere projection without any guarantee as to the final result.

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Brixius Kell
KPMG tax and legal
Tel.: +32 (0)27083727
Email: Brixius Kell

Kim Capiau
K law
Tel.: +32 (0)27084442
Email: Kim Capiau


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