Flanders stimulates the purchase of a family home at the expense of those who invest in additional real estate

Ann Westen   |  

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Ann Westen

Ann is part of the Tax & Legal team and specializes in, among other things, succession.

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You may already have heard the news. In the September Declaration on Monday the 27th of September, The Flemish Government announced a number of important changes concerning the registration dutiesregistration duties on real estate. We are happy to give you an overview of these changes.

Further reduction of the registration duties when purchasing your sole own dwelling

Flanders wants to offer an incentive for the purchase of a family home by further reducing the already reduced rate of 6% to 3%. Of course, you have to meet a number of conditions to be able to benefit from the reduced rate. We are expecting the current conditions to be maintained.

What are the conditions?                                 

  1. The purchase must concern a property located in the Flemish Region. A building plot designed for a family home will therefore not qualify for the reduced rate.
  2. The property must be mainly intended for housing. Properties with a mixed use are therefore also eligible for the reduced rate, provided that the business function is secondary to the residential function.
  3. The purchaser must be a natural person. Since this is assessed separately for each purchaser, it is allowed that the purchase is made together with a company (purchase of usufruct/ bare ownership or undivided ownership). However, only the part purchased by the natural person can benefit from the reduced rate.

It must be a pure purchase. The reduced rate does not apply to an exchange, transfer of undivided rights, or transfer out of a company.

  • One or more natural persons must “jointly and simultaneously” acquire full ownership of a property.
  • The property must be the only property of the purchaser. This means that the purchasers may not, either individually or jointly, already own a dwelling or building plot in full ownership of the entire property. When the purchasers are in possession of a dwelling or a building plot in full ownership of the entire property, obtained by inheritance and/or gift, the reduced rate cannot be applied either.

On the other hand, an acquisition in undivided ownership with, for example, brothers or sisters, or the mere acquisition of bare ownership, do not have a prohibitive effect.

If you are the owner of another property that you are still planning to sell, you can declare this is in the act of purchase. The property must then be sold within a year.

  • The purchaser must be domiciled in the property. The purchaser must be registered in the population register at the address of the property within three years starting from the date of the authentic act of purchase.

Reduction of the rate for major energy renovation

In addition to the reduced rate for the purchase of a sole own dwelling, the rate of 5% is also reduced to 1% for those who purchase a property and carry out a major energy renovation. In order to benefit from this reduced rate, you will have to fulfil a number of additional conditions, on top of the conditions for the reduced rate for purchasing a sole own dwelling.

Extinction of portability

However, these positive changes also have a downside. As a consequence, the system of portability will disappear as from 2024. This system currently makes it possible to deduct the registration duties paid on a previous property from the registration duties you need to pay when purchasing a second property, with a maximum of €13.000.

However, until the 31st of December 2023, it remains possible to apply portability if one chooses to apply the “old” reduced rates of the new standard rate.

Increase of the general registration duties

Finally, the Flemish Government has also announced an increase in the general registration duties from 10% to 12%. As a result, the acquisition of a second property, the purchase of a property by your company, or the transfer of property from your company (if the pre-emptive right is applicable), will be more expensive as of the 1st of January 2022.

When will these changes become effective?

These rate changes will take effect starting from the 1st of January 2022. The date of the authentic act of purchase will be the decisive criterion. Depending on your plans and personal situation, it may therefore be recommended to react quickly or to postpone your purchase for a while.

Discuss your situation with our experts

Do you have any specific questions about these new changes? Do not hesitate to contact us. Our team of experts will be happy to help you.