In recent weeks and months, there has been a great deal of confusion about the 6% VAT scheme for residential demolition and reconstruction. The program law of the De Wever government was finally passed in mid-July and on July 29, 2025, the law appeared in the Belgian Official Journal. Since then, therefore, the new regulation has effectively been in force.
In this article, we take a detailed look at the changes to this surely important measure for the real estate industry.
1. Administrative tolerance for entry into force on July 1, 2025.
The entry into force of the new final rule on demolition and reconstruction was anticipated July 1, 2025. It would connect so day by day with the extinction of transitional measures after June 30.
By political slowdown however, the law did not find implementation until July 29. However, on the initiative of the Minister of Finance, the VAT administration will tolerant are for the application of the reduced rate with effect from as of July 1, 2025, provided all conditions are met.
Also read: 'Administrative tolerance' announced for application 6% VAT in demolition and reconstruction
2. Existing measures are retained (excluding certain works)
The three measures that already existed on June 30, 2025, all of which covered works in immovable state to demolished and rebuilt homes, continue to exist with the known conditions.
In summary, these are the following schemes with the main (social) conditions:
The demolition of a building and reconstruction of a dwelling by:
- A natural person who will personally occupy the new home
- Single owner home of the builder and domicile;
- Maximum area of 200 m²;
- Conditions met until 31/12 of the fifth year following the year of commissioning;
- Filing statement 111/1 before any claimability VAT.
- A natural or legal person who will rent the property for at least 15 years to a recognized social housing authority, whether by management mandate or otherwise
- Lease concluded with said authority for a period of at least 15 years;
- No area requirement;
- Filing statement 111/2 before any claimability VAT.
- A natural or legal person who will rent the property for at least 15 years to a natural person who will be domiciled there
- Direct lease to a private person for at least 15 years;
- Tenant domicile requirement;
- Maximum area of 200 m²;
- Filing statement 111/5 before any claimability VAT.
As of July 1, 2025, an additional exclusion does apply for works related to the installation of central heating that runs on fossil fuels.
Specifically, works related to the specific part of this installation, such as, for example, the installation of a gas boiler, subject to 21% btw. This exclusion thus joins the ranks of the existing exclusions of the reduced rate, as garden work and construction of a swimming pool.
3. Supplies to 6% VAT refund possible (under modified conditions)
As of July 1, 2025, it will again be possible for suppliers/construction promoters to resurrected homes to be delivered to 6% btw. More specifically, it is about:
- the sale of already re-erected homes
- Whether sales on plan
Apart from certain transitional measures, a measure for supplies already existed in the past, but found an end on Dec. 31, 2023. This measure is now being with modified (social) conditions reintroduced and even extensive.
- Previously, only deliveries to natural persons eligible where the property is their only own home was.
- Henceforth, also the other destinations eligible for the reduced rate in the case of a supply, namely when the transferee uses the property for social rental Whether the rental to a natural person for private residence.
Subsequent deliveries can therefore be made at the rate of 6% VAT:
The delivery of a reconstructed home by a natural person or legal entity to:
- A natural person who will personally occupy the dwelling
- Sole proprietary residence of the transferee and domicile;
- Maximum area of 175 m²;
- Conditions met until 31/12 of the fifth year following the year of commissioning;
- Submission joint declaration 111/3-1 July 2025 before any claimability VAT, unless in case of sale on plan no later than date of delivery (provisional completion).
- a natural or legal person who will rent the property for at least 15 years to a recognized social housing authority, whether by management mandate or otherwise
- Lease concluded with said authority for a period of at least 15 years;
- No area requirement;
- Submission joint declaration 111/3-1 July 2025 before any claimability VAT unless in case of sale on plan no later than date of delivery (provisional completion).
- a natural or legal person who will rent the property for at least 15 years to a natural person who will be domiciled there
- Direct lease for at least 15 years based on closed leases;
- Tenant domicile requirement;
- Maximum area of 175 m²;
- Submission joint declaration 111/3-1 July 2025 before any claimability VAT, unless in case of sale on plan no later than date of delivery (provisional completion).
Note that again, the fossil fuel central heating which would have been installed in the home and thus is part of the delivery, will be subject to 21% btw instead of 6%.
For example, when a home is delivered with a gas-fired heating system, the price or tranche that includes this delivery will need to be disaggregated be per rate. The taxable amount of the plant is equal to the price that would typically be paid for such a plant.
4. New assessment method condition 'only' dwelling
In applying some of these measures, the requirement is that the home must have the single house is from the builder/acquirer-natural person.
The program law changes how this requirement should be assessed if the property is purchased by several people to live in it together, regardless of the form of cohabitation (de facto cohabitation, legal cohabitation, marriage,...).
Separate assessment per buyer
As of 01/07/2025, the "only" property condition must be assessed on a buyer-by-buyer basis.
This used to happen all the time joint when the individuals involved were legally cohabiting or married. This had the undesirable effect of making certain persons excluded were from the reduced rate because of the impeded possession by another person with whom there would be cohabitation.
Different rates
Thus, in practice, this may result in the works performed in real estate or delivery being subject to different tariffs according to the situation of the builders/acquirers.
The supplier will, therefore, maintain its need to split invoice according to the ownership ratio of principals/buyers. The ownership relationship will be shown in the case of works in immovable state from the new declaration 111/1-1 July 2025 and in the case of a delivery from the deed of purchase as well as from the submitted declaration 111/3-1 July 2025.
When does the assessment happen?
The assessment of the condition sole dwelling is done at commissioning of the re-erected dwelling. The new assessment method applies to commissionings as of July 1, 2025.
As a result, for ongoing demolition and reconstruction projects where there was previously an exclusion from the reduced rate with respect to married or legally cohabiting persons, as of July 1, 2025, one of these persons will be can still qualify for the reduced rate to the extent of his or her ownership share while the property is not occupied.
This is the case anyway for VAT that becomes due after the aforementioned date. The administration also accepts a regularization for the past. In that case, this person should still have the submit applicable statement.
5. When should what statement be submitted?
The application of the reduced VAT rate for demolition and reconstruction of a home is formally subject to the timely submission Of the correct statement on MyMinfin. As soon as the statement is submitted, you will receive an acknowledgment of receipt with a unique reference number which must be stated on every invoice and contract.
The new statements (111/X-1 July 2025) will presumably not be available until as of October 2025. Therefore, until December 31, 2025, the administration accepts that there is a replacement entry shall be used on any invoice, sales agreement or deed. If applicable, the ownership relationship must be evidenced by a own written statement.
As soon as available online, the applicable statement must still be submitted and this no later than 31/01/2026.
Conclusion
The new arrangement for the reduced VAT rate of 6% on demolition and reconstruction is since July 29, 2025 in effect, with a administrative tolerance for the application as of July 1, 2025. The existing measures are largely retained, but there is a additional exclusion Applicable for works related to the installation of central heating operating on fossil fuels.
Also deliveries to 6% VAT are again possible under modified terms. Finally, the condition 'single house' henceforth assessed separately for each buyer, offering more flexibility for cohabitants.
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