Belgium: Expansion of demolition and reconstruction rate published - Applicable as from June 1, 2024

Less than six months after the reduced VAT rate (6%) for demolition and reconstruction was restricted, the scheme is being extended slightly. Houses and apartments intended for rental to private individuals will also be eligible for this rate. A number of “social conditions” apply: the dwelling must be modest (with a maximum habitable area of 200m2), and the tenant must immediately take residence there (be domiciled).

To ensure the measure has a lasting impact on the rental housing market for families and singles, the reduced VAT rate can only be applied if the rental housing is leased out for at least 15 years to one or more consecutive private tenants. Consequently, the property may not be sold or repurposed during this period.

Additionally, an extension of the reduced rate for social rentals is provided (including rentals to/through public or private legal entities with a social purpose).

The relevant law was published in the Belgian Official Gazette on May 29, 2024, making it effective from June 1, 2024 (i.e., the first day of the month following publication). Both current and new projects can benefit from this measure for VAT due after June 1, 2024. Please note that the building must be intended for rental from the outset. The reduced rate does not apply to homes that are first put up for sale and then rented out. Additionally, the reduced rate cannot be applied retroactively: only works that are completed and invoiced after June 1 are eligible for the reduced rate.

However, an advance declaration must be submitted via Myminfin (my interactions - fill out a form). This declaration was not available at the time of publication in the Official Gazette (we anticipate a grace period will follow, as was the case with previous measures).