Sales of new properties subject to VAT through the TREVI estate agency network

The sale of a new property in Belgium is subject to a specific tax regime. VAT plays a central role in it and fundamentally changes the financial and legal terms of the transaction. Understanding this framework is essential to avoid surprises.

Understanding the VAT regime in property sales

VAT generally applies to new developments and properties under construction. This system is only relevant for properties that are being built, are under construction, or have just been completed. It differentiates between new properties, taxed at the standard 21% VAT rate, and existing properties, which are usually subject to registration duties instead. This distinction plays an important role in determining the total cost of acquiring a property, making it important to understand the rules clearly.

The VAT regime may apply both to the sale of houses and apartments. In the latter case, the distinction between the sale price of the constructions and that of the land may be more difficult to establish, but the rules remain identical: registration duties are calculated on the undivided shares of the land, and VAT on the value of the constructions.

What is a “new” home according to the legislation?

Une habitation est neuve lorsqu’elle est cédée au plus tard le 31 décembre de la deuxième année qui suit celle au cours de laquelle a lieu la première occupation ou la première utilisation. Exemple : une habitation qui a été occupée pour la première fois en 2023 est neuve jusqu’au 31 décembre 2025 inclus. Plus d’infos sur le site du SPF Finances.

A home is considered new when it is transferred no later than 31 December of the second year following the year of its first occupation or first use. Example: a home that was first occupied in 2023 remains new until 31 December 2025 inclusive. More information can be found on the website of the Belgian Federal Public Service Finance.

In which cases does VAT not apply to a property sale ?

VAT does not apply automatically. The sale of older buildings or land without buildings is generally subject to registration duties. In addition, certain real estate transactions benefit from exemptions depending on the nature of the property or the buyer’s profile.

VAT also does not apply if the specific conditions for a sale under this regime are not met, especially the simultaneous sale of the land and the building, or if the building is no longer considered new under the two year rule following first occupation.

New, under-construction, and off-plan properties: VAT regime

For buildings yet to be constructed, the buyer pays registration duties on the value of the land at the time of purchase, and VAT to the contractor as the works progress. For buildings under construction or buildings already built but still considered new, the legislator intended to establish a similar regime. The sale must take place no later than 31 December of the second year following the year of the first occupation or first use.

In the event of a resale of a new property, the seller may choose to apply VAT. The initial buyer, now reselling the property, must first obtain occasional VAT status from the tax authorities. To do so, they must submit a declaration in duplicate to their local VAT office, confirming their intention to sell under the VAT regime. They will then receive a specific VAT identification number. The buyer must be clearly informed of this arrangement from the outset, typically in the preliminary agreement. Given that VAT is higher than registration duties, it is essential that the buyer understands the additional tax implications before proceeding. The agreement must also distinguish between the value of the land and that of the building.

Retaining the status of a new building in order to benefit from the VAT regime

The resale must take place no later than 31 December of the second year following the year of the building’s first occupation or first use. This rule replaces the former criterion based on 31 December of the year following the year in which the property tax was assessed for the first time.

From that point , sellers will be able to deduct from the tax paid by the buyer the VAT they themselves paid at the time of their purchase. They may also request a partial refund of the registration duties paid on the value of the land if the resale takes place less than two years after their acquisition. Sellers must pay to the administration the tax they have received from their buyer. If they fail to do so within the prescribed deadlines, they will have to pay the tax, a fine that may amount to twice the tax, and late payment interest calculated per month. All of the above applies to anyone wishing to resell a new house, but also to anyone wishing to resell a new apartment.

The reduced 6% VAT rate: conditions and application

Home renovations may qualify for a reduced 6% VAT rate, subject to certain conditions. The property must be at least 10 years old, a rule in place since 1 January 2016 (previously 5 years). It must be used primarily as a private residence, with only limited professional use permitted. In addition, all works—ranging from renovation and conversion to repair and maintenance—must be billed directly to the final consumer, such as the owner or tenant.

This reduced rate does not apply to the sale of new properties, but it can be an interesting lever for those considering renovation instead of buying new.

Do you also have to pay VAT on the land ?

Since 1 January 2011, the sale of a new building has been fully subject to VAT. This means VAT applies not only to the building itself, but also to the associated land. In principle, the standard rate of 21% applies. As a result, the combined sale of land and a new building is no longer subject to registration duties, but to VAT.
For this regime to apply, three conditions must be met: the land must be eligible for construction and the building sold with VAT, both must be sold by the same party, and the transfer must take place at the same time.

If any of these conditions are not fulfilled, registration duties will apply to the land. Rates are 12.5% in Brussels and Wallonia, compared to 10% in Flanders, which can make a noticeable difference to the total cost.

Interested in investing in new-build real estate with TREVI ?

Investing in new build property under the VAT regime requires a good understanding of the tax obligations and the advantages linked to that status. Our advisers will gladly help you gain more clarity about the implications of VAT, the steps to follow and the opportunities available to you.

FAQ

How do you know whether a property sale must fall under the VAT regime ?

A real estate transaction may fall under the VAT regime when it concerns a new property, a first occupation, or a sale carried out by a VAT-liable seller in the course of their business activity. The intended use of the property, whether private or professional, is also a key factor in determining how VAT is applied.
Which VAT regimes apply to a property sale ?

Several VAT regimes apply to property sales: the standard 21% rate for new properties, a reduced 6% rate in specific cases, and exemptions for older properties or non-buildable land. The applicable regime depends on the type of property and the nature of the transaction.
Who is responsible for paying VAT in a property sale under the VAT regime ?

In most cases, the seller is responsible for invoicing and paying VAT to the tax authorities. That said, the buyer should verify that VAT has been properly applied and settled, especially in resale situations or when the property is used for professional purposes, as this can impact their deduction rights.