According to the September Statement, we can soon expect to see a change in the rates of registration tax on the purchase of real estate in Flanders. The standard rate of 10% would be increased to 12% and the reduced rate of 6% for the purchase of the only own residence would be reduced to 3%. Here is a first overview of the information that the government has already announced and some important tips about the timing of your deed.
Purchase of family home
Arrangement on Today
When purchasing the only home of your own (house or apartment) in order to effectively establish your residence there, you can - subject to conditions - enjoy a reduced rate of 6% compared to the "normal" rate of 10%. Note that it must be a residence, so a piece of building land is not eligible for this reduced rate. One of the conditions is that you are not the full owner of another residence or building land (in or outside Belgium).
An additional advantage can be enjoyed if the price of this property (note: not the portion of the price that may be paid for movable property such as furniture) is a maximum of EUR 200,000.00 or, in the central cities and the Flemish outskirts of Brussels, EUR 220,000.00. If this is the case, you will receive a "discount" in the amount of EUR 5,600.00 on the invoice from the tax authorities.
Those who opt for a thorough energy renovation (albeit under strict conditions), pay 5% registration tax. An additional discount of EUR 4,800.00 is also possible.
If you sell your starter home after some time and buy a new family home instead, then today you can often also enjoy the so-called "portability" of registration taxes. Taxes that were paid on the first purchase can be used again - as a means of payment, as it were - when paying the taxes on the second purchase, allowing you to enjoy a discount of up to 13,000 euros.
What will change about that?
The reduced rate would be adjusted from 6% to 3% registration tax. From a political angle, it is indicated that this will make the purchase of a starter home more feasible for young people. After all, the bank does not provide a loan for the registration tax to be paid, so you have to be able to put this amount on the table as your own contribution.
As a result of this reduction, the aforementioned discount is also halved from EUR 5,600.00 to EUR 2,800.00.
Those who opt for a major energy renovation will now pay only 1% instead of 5% registration tax (with any discount, also reduced to 960.00 euros).
However, the system of portability will be abolished. Therefore, in the case of a second purchase, it will no longer be possible to make offsets between successive purchases of a family home.
Acquisition of 2nd residence, building land and investment property
Apart from the changes regarding the purchase of one's own residence, the standard rate that applies to the purchase of all other real estate also changes. This would increase from 10% to 12% and will therefore apply to the purchase of not only a second residence, but also to the purchase of building land, investment property, etc.
Presumably, the "buy on plan" (buying a house or apartment in formation) will also fall under this category.
For the purchase of agricultural land and natural areas, an exception would again be made and the 10% rate would be maintained.
Professional buyers need not panic, their separate rate of 4% remains untouched by these changes.
From when?
The new rates will take effect as of January 1, 2022. Although in the past it happened that the date of compromise was decisive in the case of a change in rates, it will now be the date of the notarial deed that is the deciding factor.
So what should you look for when signing a compromise?
- When purchasing a family home: that the deadline for the execution of the deed allows the deed to be signed after January 1, 2022. This is standard 4 months, but is sometimes set shorter (for example, because the seller wants to receive his pennies as soon as possible, or is forced to do so for tax reasons).
- When purchasing other real estate: that the deed will still be executed before the end of 2021. To avoid discussion afterwards, you can have this deadline included in the compromise.
In any case, it is advisable to make clear agreements with the seller about the timing of the deed from the outset.
The abolition of portability would take effect as of 1/1/2024, with a transitional period until 31/12/2023 during which time you can choose between the "registration tax Old Style" (the old rates, with portability), or the "registration tax New Style" (the new rates, without portability), whichever is more advantageous.
However, all this is still subject to how the final law will be voted. The above is not yet final legislation. We will follow this up for you, so be sure to keep an eye on our further reports. For questions, contact us Then feel free!
