In Belgium

Property VAT (TVA immobiliere) applies to specific real estate transactions. The key distinction is between new builds (subject to VAT) and existing properties (subject to registration duties).

New constructions. When buying a new property (first sale within 2 years of completion), the building is subject to 21% VAT instead of registration duties. The land remains subject to registration duties.

Renovation works. Renovation of dwellings older than 10 years benefits from a reduced 6% VAT rate on labour and materials. This is one of the main tax incentives for renovating older rental properties.

Demolition and reconstruction. Since 2021, demolition and reconstruction of a dwelling for private use can benefit from the 6% VAT rate across the entire country (previously limited to certain urban zones). Conditions apply regarding the nature and use of the new building.

How it works

New build purchase. On a 300,000 EUR new apartment: VAT on building (250,000 EUR) = 52,500 EUR at 21%. Registration duties on land (50,000 EUR) = 6,250 EUR at 12.5%. Total = 58,750 EUR in taxes.

Renovation. A landlord renovates a 30-year-old apartment: bathroom and kitchen works totalling 25,000 EUR. VAT at 6% = 1,500 EUR instead of 5,250 EUR at the standard 21% rate.

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Good to know
The 6% reduced VAT rate for renovations applies only to dwellings used as the occupant’s residence (owner or tenant) for at least 5 years. The works must be invoiced directly to the occupant or owner, not to a company.

Practical example

Marc buys a house built in 1990 to renovate and let. He commissions 40,000 EUR of renovation works (new roof, insulation, EPC upgrade). Since the dwelling is over 10 years old and destined for residential use, the contractor invoices at 6% VAT: 2,400 EUR instead of 8,400 EUR at 21%.

Key considerations

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Warning
Applying the 6% rate incorrectly (e.g. to a dwelling under 10 years old, or to non-qualifying works like swimming pools) can result in the VAT authorities claiming the 15% difference plus penalties. Always verify eligibility with the contractor.