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On June 6, 2025, the Belgian government submitted a new legislative program to Parliament that includes significant changes to the reduced VAT rate applicable to demolition and reconstruction of housing. These amendments, set to take effect on July 1, 2025, aim to clarify and expand the conditions under which the 6% reduced VAT rate can be applied.
Key Changes:
The reduced 6% VAT rate will apply to the delivery of newly built housing after demolition and reconstruction by either a legal entity or individual seller under the following conditions:
- Owner-Occupier Sales: The buyer must be a natural person who will personally occupy the new home. Social criteria will apply, including a maximum habitable surface area of 175 m², the property must be the buyer’s sole residence, and the buyer must be domiciled there.
- Long-Term Social Rental: The property may be sold to a natural or legal person who commits to renting it out as social housing for at least 15 years, with no habitable surface area restrictions.
- Long-Term Private Rental: The property may be sold to a natural or legal person who rents it privately for a minimum of 15 years to a natural person who will immediately establish their domicile there. In this case, the maximum habitable surface area remains 175 m².
Additionally, the assessment criteria for “single residence” and the concept of “preventing possession” — relevant when multiple parties jointly rebuild or buy a property — will be updated.
Implications for Developers and Buyers:
These amendments will influence pricing, eligibility for VAT benefits, and investment decisions in Belgium’s residential construction sector. Buyers and sellers should review these new rules carefully, particularly the social and occupancy conditions tied to the reduced VAT rate.
Next Steps:
The government plans to release further detailed guidance on these changes soon.
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