The transitional arrangements for the reduced VAT rate of 6% on demolition and reconstruction will be extended until June 30, 2025. This is good news for construction promoters, developers and buyers, especially given the delays caused by the bad weather conditions of recent months.
What does the scheme entail?
A VAT rate of 21% normally applies to new construction projects, both on materials and labor. However, for demolition and reconstruction, the reduced rate of 6% are applied.
With the introduction of a permanent regime in 2024, conditions were tightened. For example, the reduced rate now applies only to:
- The only own home from a private individual.
- Dwellings with a maximum habitable area of 200 m².
- Projects where the home is at least leased for 15 years is given to individuals who establish their primary residence there.
Important: Construction promoters and developers are excluded from the permanent scheme, but can still take advantage of the temporary transitional measure.
Extension for construction promoters
The transitional arrangement that allows construction promoters to sell demolished and rebuilt homes at 6% VAT is extended by six months. This applies to projects for which the environmental permit before July 1, 2023 was requested.
- Deadline: Invoices must be issued or paid by June 30, 2025.
- Commitment: A new statement will presumably have to be submitted through MyMinFin early 2025.
This extension is an important opportunity for projects that were delayed due to weather conditions.
Scheme for 32-center cities
Individuals and corporations that do not meet the social conditions - such as second residences or properties for commercial rental - were able to use within the 32-center cities also take advantage of the reduced rate.
- Prerequisite: The environmental permit was due before January 1, 2024 have been submitted.
- Again, the transitional measure is extended until June 30, 2025.
Stay informed
In addition to this extension, 2025 brings other important changes to the construction industry. Also check out our previous article for a summary of these changes.
