As is known, a reduced VAT rate of 6% applied to (demolition and) construction works by individuals and legal entities in 32 center cities until December 31, 2023.
From January 1, 2021, to December 31, 2023, this measure was temporarily expanded to the entire Belgian territory but with “social” conditions (only principal residence, with a maximum habitable surface of 200m² or long-term rental within the scope of the social housing policy). In the context of the budget negotiations, the government has decided to adjust these measures.
From January 1, 2021, to December 31, 2023, this measure was temporarily expanded to the entire Belgian territory but with “social” conditions (only principal residence, with a maximum habitable surface of 200m² or long-term rental within the scope of the social housing policy). In the context of the budget negotiations, the government has decided to adjust these measures.
Starting January 1, 2024, the reduced rate for property developers (for the sale of a reconstructed home) will no longer apply, and the specific measure for the 32 center cities will be abolished. The reduced VAT rate for demolition and reconstruction works will then apply throughout Belgium under the same conditions. For individuals, the condition is that it must be their only and principal residence with a maximum surface of 200m². Both individuals and legal entities can still benefit from the reduced rate when they engage in long-term rentals within the scope of social housing policy.
Transitional measures have been provided for those who do not meet the new criteria. From January 1, 2024, to December 31, 2024, individuals who have purchased a reconstructed home from a property developer can still benefit from the reduced VAT rate if the building permit for the reconstruction was applied for before July 1, 2023, and services are invoiced or payments were made before the end of 2024.
For the 32 center cities, there is an additional transitional measure for individuals and legal entities that do not meet the "social" criteria. If the building permit was applied for before January 1, 2024, the reduced rate applies to invoices issued before the end of 2024. This measure does not apply to purchases from property developers but is relevant for real estate works on second homes “or projects of developers and investors who acquired properties for purposes other than long-term rental within the scope of social housing policy”. The exact meaning of the final sentence is not entirely clear, but it likely refers to properties that are rented out by investors, making them the end-users.
