Belgium: Changes to the conditions of application of the Belgian property tax allowance in the Brussels region

folder_openReal Estate, Tax
Belgique Newsletter 1T 2023 Lexunion
Belgique Newsletter 1T 2023 Lexunion

As from 1 April 2023, purchasing a first home in the Brussels Region will become more tax efficient. The tax-exempt part of the transfer fee has been raised and first-time buyers who undertake to make their new home more energy efficient will also benefit from an additional allowance.

There will be a number of changes to the main allowance. The cap on the maximum tax base will be raised to €600,000, from €500,000 previously. The allowance, i.e. the portion that is exempt from transfer fees, will be increased from €175,000 to €200,000, i.e. an additional saving of €3,125, bringing the tax benefit to €25,000. The deadline for buyers to establish the purchased property as their primary residence will be extended from 2 to 3 years. This period may even be extended to 5 years if the buyer undertakes to improve the energy performance of the purchased building. However, the obligation to keep their primary residence in the building for which the allowance was obtained for an uninterrupted period of 5 years remains unchanged, while the penalty for non-compliance with the deadline has been amended. Reimbursement of the allowance will be due on a pro rata basis, depending on the part of the deadline (per year) which has not been met. This rule is retroactive and will also apply to people who benefited from the allowance before 1 April 2023.

An additional, immediate allowance has also been introduced. It will apply when buyers undertake to improve the energy performance of the purchased building. Well aware of climate challenges and targets, and the dilapidated state of the building stock in Brussels, the regional legislator has decided to adapt the existing system so as to encourage citizens to work towards this goal in the general interest. The amount of the additional allowance is €25,000 for each improvement in energy rating achieved, with a minimum of two stars. However, this additional allowance is subordinate to the main allowance, the conditions of which must therefore be met. Anyone requesting the additional allowance who does not complete the necessary works within the deadlines will be fined. It is therefore highly recommended to seek the advice of a professional before committing to improving the energy performance of a building.

The changes made come into force on 1 April 2023. They will therefore apply to purchase agreements (“compromis”) entered into force as from 1 April 2023, and agreements subject to suspensory conditions entered into force before 1 April 2023 for which the suspensory condition is fulfilled after 31 March 2023.

Barthélemy CLOET, Actalys, Brussels

Tags: Belgium

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