Use these tips to get a better deal in the Belgian property market and avoid some of the pitfalls of buying a home in Belgium as an expat.
The property market in Belgium will be a little different to what you’re used to in your home country, so you’ll need to be savvy if you want to get a good deal when buying a home.
Expat finance expert Dave Deruytter of ING Belgium offers his tips on getting on to the property ladder in Belgium, and helps you avoid some of the traps you might encounter along the way.
With over 50 years of experience in advising expats on their finances, ING offers a range of banking, insurance and financial services to professionals moving to Belgium - from bank accounts to mortgages and advice on the Belgian pension system.
Learn about Belgian property taxes
While Belgium has one of the highest home ownership levels in Europe, buying a home in a major city can be expensive. “This means you should work out your budget to ensure you’ll be able to afford the additional costs of home ownership”, advises Dave.
Data from the Global Property Guide shows that buyers in Belgium can expect to incur fees of between 13.7% and 16.7% when buying an existing property. This fee is largely made up of registration tax, which varies from 10% (in Flanders) to 12.5% elsewhere. New-build homes are taxed even more heavily, at 22.6%. Notary fees can also add around 1.5% to the bill.
“If you’re buying a home as an investment, it’s even more important to make sure the sums add up”, says Dave, “as you’ll need to pay capital gains tax at 16.5% if you sell the property within the first five years”.
Understand the workings of the property market in Belgium
Headlines can be misleading when it comes to the housing market, so “don’t worry too much when you hear that house prices here have increased by as much as 300% in the last 20 years”, says Dave.
He adds that “you need to look at the Belgian property market in a very local sense, rather than just focusing on the national picture”. For example, in Brussels, prices rose by 3.5% year-on-year in the final quarter of 2017, but overall house prices in Belgium decreased by 0.4% in the same period.
“Consider spending some time renting to properly discover an area before you buy. In some areas of Belgium you might be able to negotiate on the price, as it’s now moving towards being a buyers’ market rather than a sellers’ one’.
Make sure you’re happy before signing a contract
“You need to make sure you’re 100% comfortable with the property you’re buying and how much you’re comfortable paying before rushing in and making an offer”, advises Dave.
In the UK, for example, you can pull out of a house purchase until contracts are exchanged, but in Belgium you’re committed to buying the property as soon as an offer has been accepted by the seller, provided the seller doesn’t break any pre-agreed rules.
Dave says: “In Belgium the home-buying process is underway as soon as a deal is agreed, and once the wheels are in motion it can be very difficult to get out of the transaction without paying sizable fees”.
Compare properties in Belgium objectively
The number one rule of buying property is to think with your head rather than your heart, and Dave recommends a considered and longer-term approach to finding the ideal home.
“Talk to people to get the feel of an area and once you’re happy with a location, shortlist three to five properties to investigate further.”
“Try to think logically and not get emotionally attached to one home, as this could result in you making an expensive mistake” he says.
Consider appointing your own estate agent
Estate agents in Belgium operate for the seller, but you can use them to get ahead of the game in your property search.
For example, you could appoint an agent to search for a property on your behalf. This will help you get in ahead of any competition, which is particularly useful in very sought-after areas. Bear in mind though that doing this can add a significant chunk to your overall bill.
Get a house survey before you commit
Buying a house is likely to be the biggest financial commitment you make, so it’s worth spending a bit of extra time and money to ensure you’ve made the right call.
If you buy a home in Belgium and it turns out to be not quite what you expected, you’re unlikely to have any significant recourse against the seller. This means you should undertake your own checks before you make an offer.
Dave says: “Always get a survey before making an offer. This might cost you a few hundred euros, but ultimately this is money well-spent should there be any issues with the property.”
Appoint a notary early in the homebuying process
In Belgium, appointing a notary (known elsewhere as a conveyancer or property solicitor) is mandatory for property transactions, and standard fees are set from area to area.
“The seller is likely to already have a notary, but you should also appoint your own early in the process. This will offer you extra legal protection and could help the transaction go through more quickly”, says Dave.
Find out how much you’ll be able to borrow
Mortgages in Belgium remain cheap, with only one-in-ten people spending more than 40% of their income on living costs.
Getting accepted isn’t a sure thing, though. Belgian banks can refuse to lend you money if you’re spending more than a third of your regular income on other debts, so get independent mortgage advice to find out what you can afford.
It’s worth speaking to your current bank first, as they may offer better deals for existing customers, before assessing the competition.
Dave Deruytter is head of expatriates at ING Belgium and has first-hand experience of living as an expat around Europe. Dave boasts more than 30 years of experience in expat financial advice on everything from bank accounts to insurance and real estate.Explore investment options