Housing in Belgium: Know the basics
A guide on what to expect when moving to Belgium, and information on whether you should rent or buy a property in Belgium.
As with living in any country, the simple question is whether it is more beneficial to rent a property or buy it outright. Buying property in Belgium is relatively cheaper than in neighbouring countries, however, expats need several years to offset Belgium’s high property transaction costs. Thus most expats on short-term stays consider renting but the Belgian rental system also has its quirks. As with living in any country, the simple question is whether it is more beneficial to rent a property or buy it outright.
Should you rent or buy?
Renting when you first arrive is obviously a quicker accommodation solution than undertaking the formalities of a purchase, particularly if you need housing immediately. Renting is more flexible and gives you time to know the areas you would like to live long-term.
However, if you rent initially, you should be aware that terminating a short-term contract early incurs a penalty, usually a payout of the full rental period. In Belgium, the standard nine-year contract is actually more flexible, as tenants can give notice any time for a set penalty. As repairs fall to the tenant, freedom to redecorate and renovate can offer renters similar benefits to owning a home.
Yet buying property appears advantageous when compared to Amsterdam, London and Paris, as properties in Brussels and Antwerp can be cheaper and you tend to get a lot more for your money, although prices in Brussels are considerably higher than other areas of Belgium. Plus, a weakened market in recent years shows some price decreases, and mortgage interest rates are at historical lows.
But transaction costs on property or land purchases are high. There is a registration tax on homes (typically 12.5 percent), and combined with legal/agent fees and other taxes, total transaction costs can add up to 25 percent of the purchase price. Plus, considering that a capital gains tax of 16.5 percent applies to properties sold within five years of purchase, short-term investments appear less beneficial.
Thus, those contemplating a stay of less than five years or those uncertain about future plans should consider renting as their best option. But if Belgium will be your home for a while, taking the plunge to buy could offer value for your money.
Furnished or unfurnished?
Apartments are typically rented unfurnished. Although furnished flats are available, they can be more expensive and targeted to upmarket short-stay tenants, or are shabby and down market. Unfurnished houses typically come bare – without light fittings, window or floor coverings, or white goods – although in some cases it is possible to arrange to buy the previous tenant’s furnishings, which can be useful for custom-fit items, such as curtains or carpets. Similarly when your contract expires, you will need to leave the house empty. In property viewings, clarify what will be left behind if a current tenant is moving out.
Finding a home
Once you see an area you like, take time to walk the streets armed with a notepad and mobile phone. Many properties display a standard orange poster reading ‘A Louer/Te Huur’ (For Rent) or ‘A Vendre/Te Koop’ (For Sale). Estate agents (agences immobilières/makelaar) also put up signs. Bear in mind that some of the best properties never get advertised. If a particular area appeals to you, ask colleagues and even local shop owners if they know of any properties available.
The website www.immoweb.be is also excellent, is in English, and allows you to search all of Belgium for a place to rent or buy. You can also check the classifieds portal Vlan (www.vlan.be) or English online sites such as The Bulletin (www.xpats.com) or Expatica’s property listings at housing.expatica.com/belgium.
You can find a list of real estate agents in each region in the Yellow Pages (www.goldenpages.be) or on Immoweb’s site. Belgium has a large choice of estate agents but you may have to do much of the legwork yourself, particularly if buying, or drop off their radar after time. Agents’ fees are typically paid by the landlord or seller of the property. English-speaking estate agents are common, particularly in Brussels, and can help new arrivals by acting as a translator. Rental agencies might even offer to drive you to visit various properties.
Renting a home in Belgium
The standard ‘nine-year’ lease is more flexible than a short-term contract.
Once you have found a desired property to rent, you need a lease (bail/kontract), an inventory (état des lieux/plaatsbeschrijving), a security deposit, and to get the phone and utilities reconnected. You will also need to take out an insurance policy for contents, plus fire and water damages. There are pitfalls in setting up home, of course, so check our special features first on renting a property in Belgium.
Belgium has an odd system where a short-term contract is an inflexible lease for rental periods up to three years, and a flexible nine-year lease is the standard contract. For uncertain newcomers, the three-year lease seems safer but this is not necessarily the case.
Short-term contracts commit the tenant to the entire agreed lease period and impose a penalty for leaving early; in many cases, you will have to pay out the full contract. You can arrange the lease to have a diplomatic clause (designed to indemnify tenants who need to break the lease because they are leaving the country) but the Belgian Court has nullified these in the past.
In contrast, the nine-year lease allows tenants to give three months’ notice at any time, with a penalty of up to three months’ rent if broken within the first three years. If you leave in the first, second or third year, you will pay an indemnity of three, two or one month’s rent respectively; no penalty applies after that. Base rent prices can be increased at each three-year term, so you may hear it referred to as a 3-6-9 due to these periodic increases.
Your rent will be adapted annually in line with the state-controlled indexation. The landlord can terminate a contract provided they give six months’ notice and either occupy the property themselves, house a family member, or carry out major work (‘major’ has a legal definition). Landlords can also give notice for no reason, but must compensate the tenant several months’ rent.
All leases in Belgium have to be registered with the Receiver of Registrations, Ministry of Finance (Enregistrement, Ministere des Finances/Registratie, Ministerie van Financien) within two months of being signed. While the landlord usually does this, it is also in your interest to check registration so tenant rights cover you.
In apartment blocks, the monthly payment may include an element of rent and a fixed amount of service charge. Sometimes the service charge will be a prepayment (provision pour charges/vooruitbetaling) and there will later be an annual assessment of common charges for the property for which you will be part-responsible. If you are seeking a better deal, negotiate down the rent and not the service charges.
Once you sign, maintenance repairs become the tenant’s responsibility, detailed in the contract. Thus, if there are things you want the landlord to correct, either specify them in the lease contract to legally bind the landlord, or don’t sign the lease until they have been completed.
The inventory (état des lieux/plaatsbeschrijving) is the source of more misery for tenants than almost any other rental procedure. Generally in Belgium, the landlord’s agent or a designated expert prepares a detailed list with photographs of the property condition, which the tenant signs. At the end of the lease, the landlord’s agent checks the property against this inventory. Check carefully; tenants can be charged for minor damage, such as a pre-existing scratch in the bathtub, simply because they didn’t notice the damage when signing the original inventory.
Some inventory agents may insist you sign a document to accept their expertise and pay 50 percent of the fee before starting; you are not obliged to do this. It is the obligation of the property owner to pay for the inventory. You are also free to select your own agent (expert immobilier) to do the check-in and check-out for an independent assessment.
You may be asked to pay up to three months’ rent as a security deposit (garantie locative/huurwaarborg). If you don’t have the money upfront, your bank might act as a guarantor and you pay later in monthly installments. Commonly, you open a blocked deposit account, which needs the signatures of both tenant and landlord for any withdrawal. Never pay the security deposit in cash – it is actually against the law.
The deposit is typically returned following an inspection of the property. If the property is deemed left in its original state then the deposit will be returned; otherwise costs of damages will be held back.
It is the tenant’s responsibility to insure the property for contents, and fire and water damage, and many rental agencies will insist on this as part of your rental agreement. Additionally, maintenance repairs fall to the tenant and you should arrange to have any chimneys or gutters cleaned and boilers serviced annually. If the property has a private garden it is the tenant’s responsibility to maintain it – communal garden costs are usually included in the service charge. You can check your contract for details.
Buying a home in Belgium
House prices are relatively low but high transactions costs can offset any short-term benefits. You can read more in our guide to buying a property in Belgium
Buying a house in Belgium is a paperwork process, with you (the buyer) first signing a purchase offer (offre d’achat/koopintenties or aankoopaanbod) once you have found a desired property. The deal is confirmed with the signing of an agreement to purchase (compromis de vente/verkoopcompromis), which binds both parties to the sale and should state any required exit clauses, such as contingent on securing a mortgage. You then have four months to get the legal paperwork and mortgage agreement secured and approved, and signing a final contract of purchase (acte authentique/authentieke) will complete the sale. You will be asked to pay around 10 percent as a deposit, which is typically placed into an escrow account until the deed is notarised. The transfer eventuates when both parties sign a notarised deed of sale (acte notarié/notariële akte), after which you will also need to pay associated fees and taxes.
An oddity of the Belgian system of conveyance is that once you have signed the compromis de vente, you become liable for the property insurance. Even if the property burns down while you don’t legally own it, you are still liable. To be covered, you need to take out insurance once the agreement has been signed.
High transaction costs mean the agreed property price and the final sum you pay are often alarmingly different. First, for most properties you will pay a 12.5 percent registration tax to the state, or if you buy in Flanders, you pay a slightly reduced tax rate of 10 percent. Properties less than two years old, however, are subject to a VAT tax of 21 percent. For down market properties with a revenue cadastral/kadastral inkomen below EUR 745 (a government assigned value), taxes are reduced to 6 percent in Wallonia and 5 percent in Flanders, but such properties are generally in short supply, poor condition or undesirable areas.
Second, there are fixed state-agreed costs for the legal services of a notaire, which vary according to the property value (up to 4 percent). Then, calculating the property registration fee, mortgage registration fee, agent’s fees (if applicable), plus the notary fees, transactions costs can quickly add up to some 15 percent of the purchase price for old properties, or some 25 percent for new properties.
However, it is worth checking out the tax benefits available to first-time buyers or for primary residences, which vary depending on the location. These include, for example, reduced registration tax.
The roles of the notary
As all notaires are obliged to charge the same fees, it is best to select one on recommendation, location or language. Failing that, have a look at www.notaire.be. Find one before you find the house, as they will need to spring into action the moment you are ready to act.
The seller’s notaire typically drafts the compromis de vente and sends it to your notaire, who should amend any unfavourable clauses. Once the text is agreed upon, you will convene to sign and hand over the first deposit. Once the period agreed in the compromis to find a mortgage starts, your notaire will do the legal checks and, all going well, within four months you will all meet in the offices of your notaire to sign the acte authentique and hand over the remaining money (usually a cheque from the mortgage lender) in return for the keys.
Structural surveys are not a legal part of securing a mortgage. It is typically an independent activity for your own peace of mind and should be done before signing the compromis de vente. You will need to show serious hidden defects in order to escape penalty-free once you have signed.
There is a full set of mortgage (hypotheeklening/prêt hypothécaire) options available in Belgium from major banks, financial institutions and other sources, including lenders that offer specialised expat services. Mortgages can be fixed for the loan term, variable annually, or reviewed every few years, with different options on the type of interest payment. Single market mortgages are also available from abroad but these can only be obtained via a broker. The loan can usually be enlarged to help with transactions costs, if your lender agrees. If certain conditions are met, tax benefits can be claimed on mortgages over 10 years. The Belgian government portalwww.belgium.be has details, or ask a local mortgage provider.
Another option is a guaranteed collateral agreement (hypothecaire volmacht/mandat hypothécaire). It is not an actual loan and instead the bank puts the mortgage on the house, but it means you avoid the mortgage fees and only pay those charged by solicitors. You can’t claim for tax benefits on this system, so it’s important to compare savings.
Some lenders may charge you for the mortgage offer itself, even if you do not subsequently draw down the loan. Check fees in advance and walk away if you are uncomfortable but bear in mind that mortgage offers have a time limit.
Banks have been more reluctant to lend since the global financial crisis, and low interest rates and dwindling profits have influenced some lenders to add products as a condition for lower rates, such as getting your salary paid into one of their accounts or taking out house contents and mortgage protection insurance schemes. The cost of insurance in Belgium is high, however, so it pays to do full calculations and shop around. If you have existing insurances, there should be no need to duplicate the cover at added cost. Lenders are no longer able to insist that you buy insurance from a specific company.
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Updated: 2014; 2015.
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