BELGIUM PROPERTY PURCHASES

Belgium Property Purchases &

Real Estate For Sale

Belgium's house prices are relatively low compared to neighbouring countries, but high transaction costs can offset short-term benefits. Here's a guide to buying a house or apartment in Belgium.

Your dream home in Belgium is like many foreign property purchases, sold with a fair amount of bureaucracy. However, the seemingly endless contracts and red tape can be defeated, as many expats have discovered, and the country has both a high standard of living and relatively low property prices, making it a popular choice for a holiday home or permanent residence. About 72 percent of Belgian residents own their own home.

Belgium uses both French and Dutch. Throughout this article, terms are given in both languages in the following format Français / Nederlands.

Should you rent or buy in Belgium?

As Belgian tenants have strong rights, the ability to decorate and improve properties is common, as are long leases. As such, most expats choose to rent, at least initially, especially those only planning a short-term stay.

Buying a home in Belgium involves dealing with a significant amount of red tape, and the costs of buying a home are high. Moreover, property prices in Belgium have been weak since the 2008 financial crisis. Some regions are experiencing a small increase in property prices, while other areas are seeing a similar decrease.

It's impossible to predict what the market will do long-term, but if you are planning an extended stay, typically five years or more, you may find that the security and saving on rent make investing in your own home worthwhile. A capital gains tax of 16.5 percent applies to properties sold within 5 years of purchase, making short-term investments significantly less profitable.

Are foreigners allowed to buy property in Belgium?

Yes. There are no restrictions in place to stop foreigners buying property in Belgium, even if they are non-resident.

How to find a property to buy in Belgium

Most properties for sale will have a distinctive orange sign in the window saying they are 'à vendre/ te koop' so keep a look out while you are out and about. As is the case elsewhere, searching online is a popular way to find a property, and we've listed some of the major property portals below.

Many expats find that hiring an estate agent is an advantage in Belgium as regulations and processes vary from region to region. In addition, estate agents may be willing and able to act as translators, helping you understand the ins and outs of your contracts. If you require these services, it's important to hire an agent who is acting on your behalf, not the seller's. This can cost anywhere between EUR 250–1000, but can be higher if more extensive services are required.

Buying a property in Belgium

Brush up on your legalese or find a good interpreter because you'll be reading – and signing – a lot of documents. The paperwork tends to come in three phases:

A commitment to buy (offre d'achat/ koopintenties), which ties the buyer to the sale but allows the seller to back out without penalty.
The sale agreement (compromis de vente/ verkoopcompromis), which outlines the details of the contract. At this point you will usually need to pay the deposit.
The notarised deed (acte notarié/ notariële akte), which transfers ownership of the property. This must be signed within four months of the sale agreement.

Real Estate Contracts in Belgium

In Belgium, most contracts must be written in Dutch or French, but it is a legal requirement that the signer fully understands the contract. This means that you have the right to bring a translator, and to have each clause explained to you in your own language. If you're looking for translation to English or German, you will probably be able to find a real estate agent or notary who speaks the language fluently. For other languages, you may need to hire a translator. However, you will have to pay the translator's fees yourself.

Your Commitment to buy

This contract binds you to buying the property. It is often requested by agents for the buyer, but is not essential. There is usually a small deposit or holding fee, which you will lose if you back out of the sale.

It's important to include appropriate exit clauses, for example, one that dissolves the agreement without penalty if you are unable to secure a mortgage or if a structural survey reveals significant damage.

Legal requirements

Buyer and seller must be represented by a notary. Their fees are fixed by the state as a percentage of the property purchase price.

The house sale must be registered at the registry office within four months of the purchase being complete. At this time, registration fees are due.

Funding purchase: Deposits and Mortgages

Deposit is usually 10 percent of the purchase price. It must be paid into an escrow account or held by a notary, and must not be paid directly to the buyer or their agent.

Your mortgage provider will usually insist that a professional valuation of the property is undertaken. This is not a structural survey. The valuer will focus on estimating the value of the property, and may overlook or not notify you of significant structural issues. Residential surveyors are uncommon, but architects provide a similar service.

Both fixed and variable rate mortgages are available in Belgium. Loans are typically for a period of 10 years or more as this provides a tax advantage.

Fees and charges

In Belgium, the costs of buying a property are split between the buyer and seller. Typically, the buyer will pay the majority of the costs with the breakdown as follows:

Buyer: 11–15 percent of the purchase price
Seller: 3–5 percent

Buying a new property is more expensive for the buyer with total fees rising to around 22 percent.

The fees typically paid by the buyer break down as follows:

Registration tax: 10 percent (Flanders) or 12.5 percent (elsewhere) (old properties only);
VAT: 21 percent (new properties only);
Notary's fee: 0.2–4 percent;
Cost of deed of sale: EUR 800–1,000;
Real estate agent's fee: 0–0.6 percent.

Why are new properties subject to extra charges?

VAT is charged on any property that is less that two years old, even if it has been lived in before. A property ages up when it reaches the second 31 December after it was first inhabited. This means that if a property was moved into any time in 2013 it will count as 'new' until 1 January 2016.

VAT is 21 percent on new properties in Belgium. However, if the property is classed as new, the buyer does not have to pay registration tax.

Lower registration tax

All Belgian properties have an assigned value called a revenu cadastral/ kadastral inkomen. While this typically relates to the rental value of the property in 1975, it's easier to treat it as an arbitrarily assigned score. If you are buying a low scoring property, i.e. one with a revenu cadastral/ kadastral inkomen below a fixed amount, then registration tax is reduced to 5 percent (Flanders) or 6 percent (elsewhere). These reductions do not apply in the Brussels region.

For families with up to two children, the score is just EUR 740. Properties in this range are often unsuitable generally and for expats in particular, being in rural or undesirable locations, small, badly maintained or unmodernised. However, as the score rises with each extra child, reaching EUR 1,045 for families with seven children, it may be worth investigating for large families.

Tax issues

A tax break of up to EUR 2,000 is available for home owners with a mortgage. The exact amount depends on several factors including when your loan was initially set up, the number of children you have and the amount of interest due. This is balanced somewhat by an annual tax on the rental value of a property (even if it is owner-occupied) of between 1.25 and 2.5 percent. The modern rental value is calculated by multiplying the 1975 value, the revenu cadastral/ kadastral inkomen, by a standard figure set by the government.

Tenant protection laws are well-established

Belgian law is PRO-TENANT.

Rents: Can landlord and tenant freely agree rents in Belgium?

The parties may freely agree on the rent. However rent increases above the rate of inflation cannot be written into the contract. In fact, the law provides that if the contract is in written form, the rent will automatically be adapted once a year in accordance with the cost of living.

If there is no written contract, rent increases or decreases during long-term contracts (i.e., nine-year terms) are usually agreed upon between the sixth and ninth month preceding the end of each set of three years. In cases where there is disagreement, the Justice of Peace (Juge de Paix) has jurisdiction. The judge can allow a rent modification, if new circumstances have provoked a rise or decrease of the normal rental value 20% above or below the rent previously agreed.

What rights do landlords and tenants have in Belgium, especially as to duration of contract, and eviction?

Contracts are always for a definite duration. Durations of nine years or less than three years are the main options provided by law, though more than nine years is possible. If the lease is silent as to duration, nine years is imposed.

When the lease is for nine years, the landlord can terminate the lease:

By notice six months before the end of the first three-year period, identifying a family member who will occupy the property;
In view of reconstruction, at the expiration of a three-year period, with strong proof of important work;
At the end of three year period, without a reason, but paying nine or six months’ rent compensation, depending on whether the contract comes to an end at the expiration of the first or second three-year period (notice period: six months).

The tenant may put an end to the lease at any time, by means of three months’ notice, and the payment of compensation of three, to, or one month of rent, depending on whether the lease comes to an end in the course of the first, second or third year of lease.

Where the lease is for three years or less, it can only be renewed a single time, and on condition that the total duration does not exceed three years. If at the duration fixed by agreement the tenant remains, the lease will be deemed to have been concluded ab initio for nine years. Notice period: three months.

Deposits

Deposit payments are allowed, but must not exceed three months’ rent. The deposit must be placed in a bank account in the name of the tenant; the interest is saved and the landlord receives a surety. The deposit may be indexed.