Property prices are still relatively cheap in Belgium compared with some other European countries, although it is expensive to buy property in Brussels. However, there are substantial additional costs involved in buying a property in Belgium arising from the tax laws and other fees, which typically add around 17% to the purchase price.
The main additional cost at the time of purchase is the registration tax, which is 12.5% of the purchase price, or 6% in the case of small properties. In Flanders, lower rates of 10% and 5% are payable, and in Brussels the first EUR 45000 of the purchase price is exempt from registration tax. You will also be required to pay tax on registration of the mortgage, as well as a fee to the mortgage lender. Notary fees are fixed by the state, and are based on the value of the property. These are usually around 1.6% of the selling price.
On the positive side, owner-occupiers in Belgium gain tax advantages. In 2004 tax regulations were introduced which allow mortgage interest, capital repayments and premiums for outstanding balance insurance to be deducted from taxable income, up to a maximum of EUR 2550.
Capital Gains tax of 16.5% is payable on properties that are sold within five years, if they do not meet certain tax-exemption criteria.
The procedure for buying a property in Belgium is as follows:
- When you find a suitable property, conduct a structural survey if you wish (this is not linked to the mortgage in Belgium).
- Appoint a notary, who will conduct legal checks on the property on your behalf and liaise with the seller's notary in dealing with the documentation.
- Agree the purchase price, sign an agreement to purchase and pay a deposit, usually around 10% of the purchase price.
- Take out insurance on the property - you are liable for any damage once the agreement has been signed.
- Secure a mortgage if necessary.
- Attend your notary's office along with the seller to sign the final contract (normally around 4 months after signing the initial agreement).
- Take possession of the property.
Mortgages are available from a range of sources including the main banks, and there are a variety of different payment and interest arrangements on offer.
People who are employed in Belgium under the special tax arrangements for foreign executives should check whether buying property in the country would invalidate their eligibility for these arrangements.
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Jamie Morris is the author of The Expat Focus Guide to Moving Abroad; 130 pages of advice covering all the main issues which anyone moving abroad must consider before, during and after relocation to another country.
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