What is long-term saving?
Long-term saving is a great way to save in a tax-efficient manner. In the year following your tax return, you pay up to 30% less tax on the amounts you save. The amount of tax relief depends on your personal situation (net taxable earned income, choice of savings amount, etc.).
Why long-term saving?
- Your state pension might not be enough to maintain your current standard of living when you retire. With long-term saving, you can build up a supplementary pension.
- Long-term saving could potentially provide a tidy tax benefit. Even if you're already saving for your pension, you can combine this with long-term saving.
- Spouses can each combine pension saving and long-term saving, if they meet the conditions to benefit from this
When should you start?
Even while you're paying off your home loan, you can get tax relief under the long-term saving scheme, depending on when your home loan started. The possibility of combining both tax schemes depends on your tax residence on 1 January.
The Flemish Housing Bonus was abolished for loans taken out in or after 2020. Given this situation, you can take full advantage of the tax relief from long-term saving while paying off your home loan.
Home loans taken out for your own home between 2016 and 2020 allow you to fully or partially combine long-term saving with the Flemish Housing Bonus, depending on when your loan started and the nature of your contract.
A KBC Brussels branch or KBC Brussels Live staff member, or your KBC Brussels Insurance agent will be happy to explain the possibilities in your particular situation.
Combining both tax schemes ('Chèque Habitat' and long-term saving) in Wallonia has been possible since 2016. Therefore, the possibility of combining them depends on the year in which you took out the home loan for your one and only home.
Contact your KBC Brussels branch or KBC Brussels Live staff member, or your KBC Brussels Insurance agent to see what combinations are possible in your particular situation.
Since 2017, you have been able to combine long-term saving with your home loan in Brussels because that type of loan no longer qualifies for tax relief.
Did you know that you can start long-term saving even if you are not yet 65 and that you will continue to pay taxes during your retirement? That way, you can enjoy a tidy bit of tax relief in the years to come. Contact your KBC Brussels branch, KBC Brussels Live or your KBC Brussels Insurance agent to see whether you're eligible for tax relief, even after you retire.
What forms of long-term saving are there?
- A savings-linked insurance product pays a guaranteed fixed rate of interest on the amounts paid in, plus a potential annual profit share, though that is not guaranteed.
- With an investment-type insurance product, the capital and income are not guaranteed. One or more investment funds in the contract determine your return.
How much does long-term saving cost?
You pay entry charges for all payments made into a life insurance scheme. A statutory insurance premium tax is also payable on the gross premiums paid.
In an investment-type insurance product, you pay management fees at the level of the investment fund and these are usually deducted from the net asset value of the fund. With investment-type insurance products, you pay no exit charges.
If you want to withdraw your savings from a savings-linked insurance product before the end date of the contract, you will have to pay exit charges. You don't pay any exit charges when you take statutory retirement or early retirement if the contract has been running for at least 10 years.
With long-term saving, you pay 10% final tax when you turn 60 or after 10 years if you took out the contract aged 55 or older.