Much ink has been spilled recently about the reduced VAT on demolition and reconstruction.
As part of the recent budget negotiations, an approved proposal is now said to be on the table broadly as follows:
- Abolition of the temporary measure.
- The "old" demolition and reconstruction scheme that existed for center cities would be extended to the entire territory, but at the same time it could still only be used for the sole and owner-occupied home (or homes intended for long-term social rental). Thus, demolition and reconstruction of a home to later rent or sell it would no longer be eligible. In other words, it would only be accessible to private individuals and no longer to the professional sector (construction promoters or (private) investors).
- A transitional arrangement until the end of 2024 would be provided for projects already started under the existing temporary measure. So this would mean that for projects started in 2023 (or earlier), 6% can still be sold (and billed) until the end of 2024. No further details are yet known about this.
So a big impact for construction promoters, because this agreement means that the reduced rate will no longer be able to be applied to sales of homes they demolish and rebuild.
We will, of course, follow this up further for you.
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