We explain the process of buying a property in Belgium as a foreigner, whether you’re after an off-plan home, new-build, or furnished apartment.
Belgium’s standard of living is high and Belgian property prices are relatively lower than many neighbouring countries and capital cities. However, high property transaction costs can offset any short-term benefits; therefore it’s important to be aware of the Belgian housing market quirks and regulations before buying a property. As a foreigner, your dream home in Belgium might feel like it is hedged with a thick bramble of bureaucracy. However, the seemingly endless contracts and red tape can be defeated, as many expats have discovered.
The housing market in Belgium
Although most expats, especially those planning a short-term stay, choose to rent a property in Belgium, buying is a smart option if you are planning an extended stay of more than five years. And with no punitive laws in Belgium to put off foreign property purchasers, there is little standing in your way. There are some key insights expats should be aware of, however, when it comes to understanding the current housing market.
For example, there remains a significant gap between house prices in different cities throughout Belgium. In the third quarter of 2017, prices in the Brussels-Capital region rose by 3.47% year-on-year to an average of €429,647. In Flanders, meanwhile, there was just a 1.71% increase, with an overall average of €236,189.
High prices also seem to be putting off buyers and investors; transaction numbers are down 7.6% year-on-year, and residential construction is dropping by 17%, according to the National Bank of Belgium.
The 10 most expensive municipalities to buy in Belgium were almost all in Brussels are: Elsene ( €617,000), Sint-Lambrechts-Woluwe, Sint-Pieters-Woluwe, Etterbeek, Ukkel (around €500,000). This is based on the average real estate prices recorded by the Belgian statistics office.
The first non-Brussels municipality, Kraainem, came 10th place. Meanwhile, Sint-Martens-Latem near Ghent ranked 11th place with an average price of €403,000. Other notoriously expensive municipalities in Flanders included Zoersel (in the Antwerp area), the upmarket seaside resort of Knokke-Heist and Leuven.
Home ownership is common in Belgium, where some three quarters of Belgian residents own their own home. Read about where to live in Belgium or Brussels. Although it’s impossible to predict what the market will do long-term, owning your own home may be worthwhile if you plan to stay. Anyone considering an investment of less than five years should consider Belgium’s capital gains tax of 16.5% on properties sold within five years of purchase.
Buying a property in Brussels
Despite average house prices in Brussels recording a 3.7% year-on-year increase in the final quarter of 2017, things are slowing. According the the Belgian statistics office, the house price index decreased by 0.4% in the final quarter of 2017.
As the home of the European Union and NATO, Brussels is very popular with international businesses. Many workers on short or medium-term assignments are provided with accommodation from their employer.
If you are looking to settle in Belgium long-term, however, buying a new-build apartment could represent a great opportunity. This means you will be able to benefit from great location and top quality furnishings; all with the knowledge that should you decide to leave, you’ll be able to let the property out to another expat working in Brussels.
Can foreigners buy property in Belgium?
There are no restrictions to stop foreigners buying property in Belgium, even if they are non-resident. However, different tax implications apply between resident and non-resident buyers in Belgium. You can read about Belgium’s visa and permits for foreigners, as well as applicable Belgian taxes and how to claim non-resident Belgian tax status.
It’s important to note that those who rent out their apartment, even temporarily on house-sharing websites such as Airbnb, must declare any income on their Belgian tax return. In 2017, the Belgian government announced it would employ processes to scan holiday-let websites; this is in an attempt to clamp down on tax cheats. Those who fail to declare rental income risk a fine of up to €1,250 or a 200% tax surcharge. New regulations that came into force at the start of 2018 allow Belgian landlords to earn up to €6,000 tax free.
Find Belgian property for sale
Listed properties for sale are known to have negotiable prices, and the idea is to make an offer slightly below your ideal price.
Most properties for sale will have a distinct orange sign in the window saying ‘à vendre/ te koop‘, so keep a look out when walking about. Searching online is a popular way to find Belgian property for sale, and we’ve listed some major property portals below, although hiring a real estate agent can provide certain key advantages.
Estate agents may be willing to act as translators and help you understand the ins and outs of your contracts, which can be useful when regulations and processes vary between Belgium’s regions. Try to hire an agent who acts on your behalf, not the seller’s. It costs anywhere between €250–1000 to buy Belgian property through an agent; this can cost more if extensive services are required.
If you’re looking at buy-to-let investments, the Belgian government provides a tool to calculate an estimated rental price for your property. Expatica also has a housing portal where you can find your dream home.
Purchasing an off-plan home
Buying a home off-plan is very common in Belgium, especially in highly sought-after areas such as Brussels, where developments are largely reserved before the build has even started. While early sales are helpful for developers because they help finance the overall build, they also allow buyers to secure the best plots, and on some occasions even grab a better deal.
Developers (or their real estate agents) generally start marketing properties as soon as permits to build them have been granted. When you visit a marketing office, as well as being able to visit an example show home, you should be able to view 3D images and models of the development.
Buying from Belgian developers
Rather than buying an off-plan home or furnished apartment, some home movers choose to build their own properties by purchasing a plot of land and employing architects and builders – but this can be an expensive business in Belgium.
You’ll need to pay registration tax on the land, notary fees, insurance premiums, and bills for land surveyors, energy surveys, and stability surveys. With this in mind, choosing a ‘turnkey’ option of buying a home directly from a developer can ease the stress of moving to a new property and ensure you end up living in a higher quality environment. Many developers in Belgium use sustainable building practices: another advantage to buying a new property from the new generation of eco-conscious Belgian architects.
Rules protecting new-build buyers in Belgium
When you buy a new home in Belgium, you need to pay a reservation fee (5%) to secure your plot; but this 5% is deducted from the outstanding amount. Compared to some other countries in Europe, Belgium offers strong protections for new-build home buyers in case something goes wrong, with fines for house-builders who fail to finish their builds in line with the original timescale.
Most properties in Belgium are sold as freehold, too. As a result, you won’t need to worry about paying any punitive taxes on the land while you’re living in your property.
Legal requirements for your Belgian contracts
In Belgium most contracts must be in Dutch or French; it is a legal requirement that the signer fully understands the contract. This means that you have the right to bring a translator and have each clause explained in your own language.
If you’re looking for translation to English or German, you should be able to find a real estate agent or notary who speaks your language fluently. For other languages, you may need to hire a translator and pay the translator’s fees yourself.
Both buyer and seller must be represented by a notary. Their fees are fixed by the state as a percentage of the property purchase price. You must register the house sale at the registry office within four months of completing the purchase; after this period, registration fees are due.
Finance your Belgian property: deposits and mortgages
The deposit or down payment is usually 10% of the property purchase price. You must pay this into an escrow account or give it to a notary; you must not pay it directly to the buyer or their agent.
Both fixed and variable rate mortgages are available in Belgium. Loans typically last for at least 10 years or more; this provides a tax advantage in Belgium.
Your mortgage provider will usually insist that a professional valuation of the property is undertaken, which costs around €100-200, but note that this is not a structural survey. The valuer will focus on estimating the value of the property and may overlook or not notify you of significant structural issues. Residential surveyors are uncommon but architects in Belgium provide a similar service.
Costs of buying Belgian property
The buyer and seller split the costs of buying a property in Belgium. However, the buyer will pay the majority of the costs; around 11–15% of the purchase price, and the seller around 3–5%. Buying a new property is more expensive for the buyer with total fees rising to around 22% for new-builds, due to different applicable tax rates.
The fees typically paid by the buyer break down as follows:
- Registration tax (old properties only) – 10% (Flanders) or 12.5% (elsewhere); ). From 1 June 2018, buyers in Flanders have seen this rate cut to 7%. For homes priced up to €200,000, buyers don’t need to pay fees on the first €80,000; they also get an extra discount of €5,600.
- VAT at 21% (new properties only) – properties less than two years old have Value Added Tax charges.
- Notary’s fee – 0.2% to 4%, a fee fixed by law that depends on the purchase value; You can get an estimate of how much you’ll need to pay in notary fees on the Royal Belgian Notariat Federation website.
- Cost of deed of sale: €800–1,000
- Real estate agent’s fee: 0.2–0.6%
Why are new Belgian properties subject to extra charges?
You will need to pay VAT on any Belgian property that is less that two years old, even if it has been lived in before. A property’s age is up when it reaches the second 31 December after it was first inhabited. This means that if someone moved into a property any time in 2015, it will count as ‘new’ until 1 January 2018.
Although VAT is payable if the property is classed as new, the buyer does not have to pay registration tax; this is only applicable to properties older than two years.
Lower registration tax
All Belgian properties have an assigned value called a revenu cadastral/kadastral inkomen. While this typically relates to the rental value of the property in 1975, it’s easier to treat it as an arbitrarily assigned score.
If you are buying a low scoring property; i.e. one with a or revenu cadastral/kadastral inkomen below a fixed amount; then registration tax is only 6% when buying a Belgian property. These reductions do not apply in the Brussels region.
The Flemish region has overhauled this outdated system, however. Buyers in Flanders previously had their fee cut to 5%; however, since 1 June 2018 that fee has risen to 7%. Buyers purchasing cheaper homes (under €200,000) don’t have to pay on the first €80,000; they also get an extra discount of €5,600.
Tax deductions for buying Belgian property
A tax break of up to €2,000 is available for homeowners with a mortgage. The exact amount depends on several factors; these include when you initially set up your loan, the number of children you have, and the amount of interest due.
However, this is balanced somewhat by an annual tax on the estimated rental value of your Belgian property (even if it is owner-occupied) of between 1.25 and 2.5%. The modern rental value is calculated by multiplying the 1975 value, the revenu cadastral/ kadastral inkomen, by a standard figure set by the government.
Terminology you need to know
When you are searching for a new property to buy, make sure to brush up on your terminology; after all, you will be reading and signing a lot of documents. The paperwork tends to come in three phases:
- A commitment to buy (offre d’achat/ koopintenties), which agents often request, but is not essential. It ties the buyer to the sale but allows the seller to back out without penalty. It is common to put down a small deposit or holding fee; you will lose if you back out of the sale.
- The sale agreement (compromis de vente/ verkoopcompromis), which outlines the details of the contract. At this point you will usually need to pay a deposit of around 10% of the purchase price; after this you have four months to pay the remaining balance (usually via a mortgages).
- The notarized deed (acte notarié/ notariële akte), which transfers ownership of the property. You must sign this within four months of the sale agreement.
It’s important to include appropriate exit clauses; for example, one that dissolves the agreement without penalty if you are unable to secure a mortgage or if a structural survey reveals significant damage.