Demolition and reconstruction of dwellings: reinstated 6% VAT rate for supplies (subject to revised conditions)
The administrative formalities remain largely unchanged. Buyer and seller must submit a joint electronic declaration, and documents such as the environmental permit, construction contract, and sales agreement must be provided. As long as it is not yet possible to file Form No. 111/3 via the MyMinfin website, the following clauses must be included in the sales agreement and/or authentic deed: "Application of the 6% VAT rate for demolition and reconstruction of a dwelling in accordance with item XXXVII, § 3, second paragraph, 1°, (a), (b) or (c), of Table A of the Annex to Royal Decree No. 20 of 20.07.1970 regarding VAT, as set out in Article 53 of the Programme Act (Parliamentary Document No. 56 0909/001)," and "The declaration as referred to in the aforementioned item XXXVII, § 3 shall be submitted without delay via MyMinfin as soon as the system is operational." The declaration must then be introduced as soon as possible.
A transitional regime has also been provided. In principle, during the interim period (from 1 July 2025 until the Act’s entry into force), a 21% rate applied to such transactions, with the possibility to retroactively regularise to 6% once the law became effective. In such cases, sellers would have to issue a corrective document and reflect the adjustment in their VAT return. However, due to the government's intention to preserve the impact of this measure from 1 July 2025 onward, the tax administration has permitted the application of the 6% rate as of that date, provided all conditions of the Programme Act are met. This tolerance was previously announced in Circular 2025/C/44 of 10 July 2025.
Heating systems using fossil fuels: reduced VAT rate restricted
A new limitation applies to the reduced VAT rate for renovation works and the demolition-reconstruction regime. The 6% rate no longer applies to the supply and attachment to the building of parts or components of a central heating system operating on fossil fuels, including burners and control devices connected to the boiler.
Here, too, a ministerial tolerance applies. The benefit of the reduced VAT rate remains available—if the other conditions are met—for agreements signed by 28 July 2025 (in case of works) or 30 June 2025 (in case of supply), provided the VAT becomes chargeable by 30 June 2026.
To benefit from the tolerance, the parties must be able to prove the date of the agreement through reliable evidence, such as:
Abolition of the reduced VAT rate on coal
The VAT scheme for the sale of demolished and rebuilt dwellings is reintroduced permanently, with some adjustments:
- The scheme remains applicable to dwellings used by the buyer as their sole and principal residence (for at least five years), or intended for long-term rental via a social rental agency or similar institutions (minimum 15 years).
- A new provision extends the reduced rate to dwellings purchased with the intention to rent to a natural person who will immediately establish their domicile there, for a minimum of 15 years.
A key change from the previous scheme (and from the scheme for works in immovable property) is a new size limitation:
- The "new" reduced rate applies only to dwellings with a maximum habitable area of 175 m² (instead of the usual 200 m²) when the buyer intends to occupy the property or rent it to a natural person.
- For other cases, such as reconstruction by a private builder, the 200 m² limit remains.
- No surface restriction applies when the property is intended for long-term rental to a social institution.
The administrative formalities remain largely unchanged. Buyer and seller must submit a joint electronic declaration, and documents such as the environmental permit, construction contract, and sales agreement must be provided. As long as it is not yet possible to file Form No. 111/3 via the MyMinfin website, the following clauses must be included in the sales agreement and/or authentic deed: "Application of the 6% VAT rate for demolition and reconstruction of a dwelling in accordance with item XXXVII, § 3, second paragraph, 1°, (a), (b) or (c), of Table A of the Annex to Royal Decree No. 20 of 20.07.1970 regarding VAT, as set out in Article 53 of the Programme Act (Parliamentary Document No. 56 0909/001)," and "The declaration as referred to in the aforementioned item XXXVII, § 3 shall be submitted without delay via MyMinfin as soon as the system is operational." The declaration must then be introduced as soon as possible.
A transitional regime has also been provided. In principle, during the interim period (from 1 July 2025 until the Act’s entry into force), a 21% rate applied to such transactions, with the possibility to retroactively regularise to 6% once the law became effective. In such cases, sellers would have to issue a corrective document and reflect the adjustment in their VAT return. However, due to the government's intention to preserve the impact of this measure from 1 July 2025 onward, the tax administration has permitted the application of the 6% rate as of that date, provided all conditions of the Programme Act are met. This tolerance was previously announced in Circular 2025/C/44 of 10 July 2025.
Heating systems using fossil fuels: reduced VAT rate restricted
A new limitation applies to the reduced VAT rate for renovation works and the demolition-reconstruction regime. The 6% rate no longer applies to the supply and attachment to the building of parts or components of a central heating system operating on fossil fuels, including burners and control devices connected to the boiler.
"Fossil fuels" refers to all non-renewable natural energy sources. In Belgium, this includes natural gas, fuel oil, coal, and even peat.
This new exclusion is effective from 29 July 2025 (publication date of the Programme Act) for works in immovable property related to renovation or demolition-reconstruction. However, for the supply of a rebuilt dwelling, the exclusion applies as from 1 July 2025, since the new provisions apply to VAT chargeable from that date.
Here, too, a ministerial tolerance applies. The benefit of the reduced VAT rate remains available—if the other conditions are met—for agreements signed by 28 July 2025 (in case of works) or 30 June 2025 (in case of supply), provided the VAT becomes chargeable by 30 June 2026.
To benefit from the tolerance, the parties must be able to prove the date of the agreement through reliable evidence, such as:
- a quote signed by the customer by 28 July 2025, with verifiable signing date (e.g., email confirmation);
- an agreement signed by both parties by the respective cut-off date;
- a proof of payment made by the customer before the deadline, referring explicitly to the quote or contract;
- an advance invoice issued by the respective deadline with sufficient detail to justify the 6% VAT rate.
Abolition of the reduced VAT rate on coal
The 12% VAT rate on coal is abolished. Specifically, item VIII of Table B in the Annex to Royal Decree No. 20 is repealed. This item granted a reduced VAT rate of 12% for:
- coal and solid fuels made from coal;
- lignite and pressed lignite (excluding jet);
- coke and semi-coke from coal, lignite, or peat;
- non-calcined petroleum coke used as fuel.
The standard VAT rate of 21% now applies to the supply, intra-EU acquisition, and import into Belgium of the above-mentioned goods for which VAT becomes due from 29 July 2025.