Demolition and reconstruction at 6% VAT – new scheme

Introduction of the Scheme: A draft program law submitted on May 27, 2025, proposes a permanent reduced VAT rate of 6% for the demolition and reconstruction of homes, set to take effect on July 1, 2025. This aims to enhance the supply and affordability of new homes in Belgium.
Eligibility Criteria: The reduced VAT rate will apply to the sale of rebuilt homes to private individuals (maximum 175m²) without special conditions, and to investors who rent properties, provided they meet specific social conditions. The construction contracts for demolishing and rebuilding homes will also maintain the reduced rate for various housing types.
Next Steps: The law is pending approval from the House of Representatives, with plans for it to be enacted by July 1, 2025. This initiative is seen as a significant step towards making the Belgian real estate market more sustainable and ensuring affordable housing availability. Project developers and investors are encouraged to assess their projects to take advantage of the new VAT scheme.

Previous news April 22, 2025

Reintroduction of 6% VAT Rate: Beginning July 1, 2025, the 6% VAT rate will again apply to sales related to demolition and reconstruction projects in specific situations, including homes designated as the buyer’s primary residence, homes intended for long-term rental, or for social housing purposes, with strict conditions on the maximum habitable surface area.
Exclusions and Conditions: The 6% VAT rate will not apply to the supply and installation of fossil fuel boilers and related components, but will remain applicable to other heating system parts that do not rely on fossil fuels. Additionally, the VAT rate will only be available to projects that comply with prior declaration requirements.
New Regulations for Joint Buyers: A change in the regulations now requires that the eligibility for the 6% VAT rate be assessed individually for each buyer in cases where multiple people are involved, contrasting with previous rules that differentiated based on marital status, thereby aiming for more equitable treatment among buyers.