Reduced VAT rate

When the coalition agreement was ratified (30/09/2020), a change in the VAT rate for the demolition and reconstruction of buildings was proposed in the context of a more social housing policy: from 21 to 6% across Belgium. An initiative to give people with limited resources the opportunity to build a house.

When the coalition agreement was ratified (30/09/2020), a change in the VAT rate for the demolition and reconstruction of buildings was proposed in the context of a more social housing policy: from 21 to 6% across Belgium. An initiative to give people with limited resources the opportunity to build a house.

Are you buying a house that you want to completely demolish and then rebuild? Then you can enjoy a reduced VAT rate of 6% instead of the usual 21%. This was already possible in 32 central cities, but since 1 January 2021 you can enjoy the measure everywhere. The conditions for cities that do not belong to the 32 central cities are somewhat refined. For parcels located in one of the 32 central cities.
The favorable rate also applies to owners who later 'step into' a project (just think of co-housing projects or owners who purchase through a building promoter). The new regime is a temporary arrangement that runs from January 1, 2021 to December 31, 2022.
There are some conditions attached to the reduced VAT rate. We will go through the checklist with you:
  • There must be the demolition of a building and the reconstruction of a house .
  • The demolished building must therefore not necessarily have been “a house” .
  • The dismantling and rebuilding must be done by the same person . This can be a private individual, but also a property developer.
  • The demolition must be extensive and affect the entire building.
  • The rebuilt house must be on the same cadastral parcel as the demolished building.
  • You must establish your domicile in the rebuilt house. It must then be your only home that is mainly used as a main residence. You must meet this condition for at least five years , otherwise you will have to repay part of the benefit you have enjoyed.
  • The total habitable surface of the rebuilt house may not exceed 200 square meters (even if it is an apartment).
Know that we can also finance the reduced VAT rate (with the exception of registration and notary fees). Do not hesitate to contact us about this, because tell us yourself, who does not like to read that they have to pay 15% less?
Want to know more about financing VAT? Contact us!
Source: Fednot (20/01/2021). When do you enjoy the reduced VAT rate of 6% for demolition and reconstruction? Retrieved from http://notaris.be
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