Buying a house in Belgium is a relatively simple process, with you (the buyer) firstly signing a commitment to purchase (Koopintenties or Aankoopaanbod/Offre d'achat) once you have found a desired property. This gives the buyer the option to buy without a financial commitment, but will become a confirmed deal with the signing of an agreement to purchase (compromis de vente/verkoopcompromis). Once the legal paperwork and mortgage agreement has been secured and approved - a process taking up to a maximum of four months - you will then sign a final contract of purchase (acte authentique/authentieke), and the purchase of your house is complete.
The purchase happens via a notarised deed of sale (notariële akte/acte notarié); one each for the buyer and seller.
Typically, you will pay a deposit at this stage of the purchase. This is usually between 5 - 10 percent, although rules differ over the purchase of new build houses and apartments.
The price of the property agreed with the seller and the sum of money you finally hand over are often alarmingly different.
Firstly, for most properties you will pay 12.5 percent registration tax to the state. For down market properties with a revenu cadastral/kadastral inkomen below Euro 740, this can be reduced to 6 percent, but there are not many of those to be had! Buyers in Flanders benefit from a slight reduction in the basic rate of 12.5 percent, with the current figure standing at 10 percent.
There are fixed state-agreed costs for the legal services of a notaire, charges, which vary according to the property value. So, with the registration fee of 12.5 percent, a mortgage registration fee of 1.1 percent plus the notary fees, it all adds around 15 percent to the nominal price. However, on the plus side, VAT of 21 percent may not be due if it is a new build house.
It is worth checking out extra benefits for first-time buyers, which vary depending on the location.
The roles of the notaire
As all notaires are obliged to pay the same fees, it is best to select one on recommendation, and preferably one who is conveniently located and also speaks a common 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, you all visit the offices of the seller's notaire to sign and hand over the deposit.
You now have a period agreed in the compromis to find a mortgage; your notaire will do the legal checks, and all going well, four months later 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.
Strangely, 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.
Another 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 whilst you don't legally own it, you are still liable.
There is a full set of mortgage (hypotheeklening/prêt hypothécaire) options available in Belgium from many sources including the major banks. Mortgages can be fixed for the term of the loan, variable annually, or reviewed every three or five years, with different options on the type of interest payment.
Ask your lender for a printed tabular estimate covering the loan period, usually between 15 and 30 years, and discuss the options available to you. The loan can include the 15 percent additional costs if your lender agrees.
Another option is to opt for 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.
Some lenders will charge you for a mortgage offer itself, even if you do not subsequently draw down the loan. Check this in advance and walk away if you are uncomfortable with the arrangement. Also bear in mind that mortgage offers have a time limit. Lastly, single market mortgages are available from, say, Germany but these can only be obtained via a broker.
Some lenders will try to link the loan to their own property and life insurance. Therefore, ensure that you see the costs for this clearly separated and compare with other quotes. Additionally, in Belgium the cost of insurance is quite high.
If you have existing life insurance, there should be no need to duplicate the cover at a higher cost. Lenders are no longer able to insist that you buy insurance from a specific company.
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