Belgium: 6% VAT on the sale of newly reconstructed buildings

Overview
11 Aug 2025    2 minute read
VAT Belgian Program Law Real Estate Tax

In brief

Since 1 July 2025, a permanent 6% VAT rate is applicable to the sale of newly reconstructed building (after prior demolition) for (residential) rental purposes. This marks a shift from prior measures which had largely restricted the application of the 6% VAT rate for real estate investors seeking to acquire and lease residential properties.

Contents

Background

The Program Law of 18 July 2025 introduces material changes to the scope of the 6% VAT rate in Belgium. These changes affect, inter alia, the demolition-reconstruction works, the sale of reconstructed dwellings, the installation of heating systems and the supply of coal. They are further clarified in administrative guidelines (nos. 2025/C/44, 2025/C/46, 2025/C/47 and 2025/C/48).

We outline below the principal modifications relevant to the sale of newly reconstructed dwellings.

Conditions for the reduced rate of 6%

As of 1 July 2025, the 6% VAT rate applies to the sale of a dwelling after demolition and reconstruction by a supplier/main contractor (either a legal person or a natural person) who will sell the dwelling:

  • To a private individual who will personally occupy the new dwelling as its sole and principal residence for at least five years. In this case the total habitable surface area must not exceed 175 m².
  • To a private individual or a legal person who will rent out the new dwelling for long-term social housing purposes (for at least 15 years). In this case, there is no condition relating to the total habitable surface area.
  • To a private individual or a legal person who will rent out the new dwelling for long-term private housing purposes (for at least 15 years) to a private individual who will without delay establish their domicile. In this case, the total habitable surface area must not exceed 175 m².

This last option in particular is significant in that the reduced rate can now be applied to transactions involving institutional or professional investors acquiring a property for letting purposes, provided the tenants of such property establish their domicile therein.

A joint electronic declaration must be submitted by the supplier and the acquirer, together with supporting documents such as the urban planning permit, construction contract, sale agreement and/or notarial deed. Specific references on the invoices, sale agreement and/or notarial deed need to be mentioned.

Key takeaways

The sale of reconstructed dwellings by real estate investors and developers is now clearly eligible for the 6% VAT rate, subject to compliance with the surface and use conditions.

Potential Impact on your investments

This change in policy will have a significant impact on your current and future investments. The reduction in VAT from the standard 21% to 6% will result in significant savings, particularly on large investments in rental properties.

Next steps

Developers and constructors should review ongoing and future projects in light of the new eligibility thresholds and surface area limitations.

We are here to help you navigate these changes. Please do not hesitate to contact our Real Estate & Tax Team which combines unique legal, tax and regulatory expertise.

Contact Information
Benjamin Pirlet
Counsel
Brussels
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benjamin.pirlet@bakermckenzie.com
Olivier Van Baelen
Counsel
Brussels
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olivier.vanbaelen@bakermckenzie.com

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