- Belgium’s federal government has proposed removing the 6% VAT rate on certain real estate developer activities.
- The changes would affect the housing demolition and reconstruction schemes.
- The temporary measure allowing reconstructed homes to be sold at a reduced VAT rate would be removed.
- The permanent system for applying the reduced rate to projects in urban areas would also undergo changes.
- From January 1, 2024, the sale of properties by developers under a demolition-reconstruction project would no longer benefit from the 6% VAT rate.
- The reduced VAT rate would only apply to relevant property sales throughout Belgium if certain conditions are met.
- Transitional arrangements have been proposed to allow for the continuation of the temporary and permanent schemes under certain conditions.
- The proposed changes would have far-reaching implications and significantly restrict the scope of the reduced VAT rate.
- Property developers selling new homes after demolishing existing buildings would be excluded from the reduced VAT rate.
- Investment in real estate for rental purposes in the 32 central cities would no longer be subject to 6% VAT.
- The changes may increase the selling price of older homes and undermine the financial feasibility of redevelopment projects.
Source: taxathand.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
