From next year, individuals and building promoters can demolish and rebuild an old building at a reduced VAT rate of 6%. However, this must be the buyer's only and own home with a maximum habitable surface of 200 m2. We summarize the application conditions - as they stand today - for you below.
Today, the reduced VAT rate (6%) is only applicable for demolition and reconstruction in one of 32 center cities. In addition, it is required that the property be used primarily as a home by the buyer after the works.
The program law approved on December 18, 2020 provides for an extension of the application of this reduced rate to the entire Belgian territory. The existing scheme of demolition and reconstruction in the 32 center cities will also be maintained.
The measure applies to builder-natural persons whose home after the works is the only and predominantly own home (some exceptions possible). The buyer must establish his main residence here for a period of 5 years.
In addition, the measure also applies to building promoters who purchase old real estate, demolish it and sell it back to natural persons. The sale of the new property can then, unlike today, also be done at the reduced rate of 6%. This is of course subject to the same conditions as mentioned above.
Thus, the new regulation is reserved only for natural persons who will occupy the property themselves and not for landlords, second residents or companies.
In addition, the reduced rate will also apply to homes that are made available to a social rental agency for a period of 15 years.
The reduced rate can only be applied if the property has a maximum habitable surface of 200 m2. Common parts in apartments do not have to be taken into account.
In addition, before the tax becomes due, the builder/natural person or the building promoter must also submit a declaration to the local inspection office confirming that the conditions will be met. In the case of a building supervisor, the buyer-natural person must co-sign this declaration.
The extension is valid for 2 years only, namely for 2021 and 2022. Projects that have already started could also benefit from the measure, provided that a statement is submitted to the local audit office before March 31, 2021. This for invoices made from January 1, 2021. How this statement will / should look like is not yet known.
Due to the strict conditions of application, it must be examined project by project whether the reduced rate can be applied and whether this is useful for you or can be. We can of course assist you with this.
If you would like more information, please feel free to contact one of our specialists. You can reach us at any time by calling 051 26 82 68 or by sending an e-mail to email@example.com.