Purchase and ongoing costs Belgium
Purchase and ongoing costs
The “buyer’s fees” (also known as “notary fees”) generally include the total costs due in taxes and notary fees. These costs are twofold: one part the costs related to the purchase of the property and the second part related to the notarization of the mortgage. In Belgium, registration fees (transfer tax) vary from region to region.
Registration rates have been a standard 12% in the Flemish region (Flanders) since Jan. 1, 2022. A reduced rate of 3% applies in Flanders for the purchase of a home that becomes the principal residence.
Registration rates are 12.5% in Wallonia (the Walloon region). When a “modest home” is involved, a 6% registration fee is applicable under certain conditions. The benefit of the reduced registration fee applies to homes with a cadastral income of up to €745, to be increased to €845, €945 and €1,045 as a household gives more children. The benefit of the reduced registration fee is also in place for homes located in an area with “real estate pressure” and that do not exceed a certain purchase price (varies by municipality). For houses that become the principal residence (and continue to live there for at least 3 years), an abatement (flat rate reduction/reduction) is applicable. The abattement amounts to no registration fees being due on the first €20,000 of the purchase price (effectively, therefore, a discount on registration fees of €2,500).
Registration rates are 12.5% in the Brussels Capital Region. For houses that become the principal residence (within two years at the latest, and remain so for at least five years) and have a purchase price of less than €500,000, an abatement (flat rate reduction/reduction) is applicable. The abattement amounts to no registration fees being due on the first €175,000 of the purchase price (effectively, therefore, a discount on registration fees of €21,875).
Real estate agents in Belgium are allowed to set their own rates. In a sale, you pay between 2% to 6% of the sale price on average. 3%, however, is a very common rate. Want to find out how much a real estate agent charges? Real estate agents are required to display their rates in a visible place (for example, in the window or on their website).
The Belgian notary will charge fees + VAT, and in addition, some fixed cost components such as administrative and property transfer fees are at issue. These costs do not vary by region and are therefore the same throughout Belgium. There are also costs involved in notarizing the mortgage (the mortgage mandate). Here fixed costs are involved (between €700 and €1,050) and in addition variable costs for notary’s fee + VAT (higher with higher mortgage amount).
In addition to the buyer’s fee, other costs are often involved such as costs for a building inspection, the appraisal (valuation) and financial advice.
A house in Belgium is taxed through the so-called real estate tax; this is a tax on the (notional) income from real estate based on the indexed Cadastral Income (Cadastral Income (KI) is the average normal net income (net rental value) that the property would yield during one year. It is a measure used in Belgium in the same way as the WOZ value in the Netherlands). You could compare the property tax to the owner-occupied home tax in the Netherlands. The amount of this tax varies from region to region. The current levy rates are as follows:
– 2.5% of the CI payable tax for homes located in the Flemish Region
– 1.25% of the CI tax payable for homes located in the Walloon Region and the Brussels Capital Region
If the vacation home is sold again within five years, you will pay personal income tax on the capital gain you make on the home. After a period of five years, this gain is exempt from tax.
The tax treaty between the Netherlands and Belgium provides that Belgium may levy taxes on assets in the form of real estate located in Belgium such as a vacation home. As a result, a Belgian house is taxed in Belgium and no longer in the Netherlands (box 3). Incidentally, the house must still be declared in the Dutch tax return, but the Netherlands will grant a double tax relief.
You can find detailed information about the Belgian tax rules on the Belgian tax website: https://financien.belgium.be/nl/particulieren/belastingaangifte/tarieven-belastbaar-inkomen
