Flanders intends to support access to property by lowering registration fees to 3% for the purchase of a home. A remarkably low rate compared to the 12.5% in force in the other regions.
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The Flemish government struck hard by announcing a further reduction in registration fees for the purchase of a family home. At 1is January 2020, when the “woonbonus” (the long-term tax benefit for the repayment of the mortgage loan for a main residence) was abolished, they had already been reduced, in compensation, from 10% to 6%. Less than two years later, they are reduced to 3%. However, the portability of these registration rights is canceled.
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Substantial savings
“This measure should not have direct impact on prices which are regulated by the market and competition. It clearly aims to facilitate access to property for young people while prices are extremely high, “reacts Kim Ruysen, CEO of Trevi.” This is a very positive signal.
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On a property with a value of 350,000 euros, this indeed represents a saving of 10,500 euros for the purchaser. “We must therefore expect that some postpone the signing of the deed or compromise, in order to take advantage of this rate, while we will see a reverse movement for buyers of second homes or property of investment, ”according to Filip Dewaele, Managing Director of Dewaele Vastgoed.
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In fact, at the same time, the Flemish Region has decided to raise 12% (against 10%) registration fees for second homes where the goods intended to be rented out. For those who are active in this market, this little bad surprise should not have a significant impact. The notaries are still expecting a boost in the real estate market on the Coast in the coming months.
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“Some will postpone signing the deed or compromise to benefit from this new rate.”
Filip Dewaele
Director General of Dewaele Vastgoed
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A virtuous return of the fiscal pendulum that Kim Ruysen welcomes, “while demand for conventional homes clearly exceeds availability, and since the coronavirus crisis, we are witnessing an extreme boom in second homes, which are still a luxury. ..” For the undeveloped land, no change. The rate remains fixed at 10%.
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Large gap between regions
What is striking is the yawning “gap” that is widening with the other two Regions. In Brussels and Walloniais the rate of 12,5% which applies, both for family homes that for investment goods and the second homes. For the CEO of Trevi, “this large difference in registration fees between regions really poses a question. Shouldn’t the Federal government sooner or later take up the question?”, He wonders. “This difference in treatment between citizens becomes really impressive and can hardly be justified.”
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At this stage, the question of reducing registration fees is not a topical issue in Wallonia. “We are entering a budgetary conclave and the choices will be numerous, given the post-covid and post-flood situation which is still urgent,” according to the spokesperson for the Minister of Finance Jean-Luc Crucke. The firm stresses that the aid is already reinforced for first-time buyers with a reduction of 20,000 euros on the first home. It provides a – meager – saving of 2,500 euros. On the other hand, they can still benefit from the housing check, a long-term tax advantage that favors low-income households with dependent children. But this aid does not especially benefit young households who are in lack of equity to finance their acquisition project.
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In the Brussels Region, first-time buyers benefit from exemption from registration fees on the first tranche of 175,000 euros for goods less than 500,000 euros. In the government agreement, it is expected that the reduction ceilings are increased to keep up with rising house prices. “However, we had to face an unprecedented health crisis which had a strong impact on the regional budget. Let us also remember that an increase in the allowance, in order to have an impact, must be substantial. With a budget currently under pressure, the Brussels Government is rather considering one-off tax incentives in terms of registration fees aimed, for example, at promoting the sustainable renovation of buildings “, explains the spokesperson for the Brussels Minister of Finance Sven Gatz. Concretely, the Brussels government would like to provide an extra effort, from 2023, allowing, via the abatement technique, tax relief for the purchase of a first home, linked to green investments. In this area too, Flanders has set the bar quite high given that registration fees drop, for a purchase accompanied by major energy renovations, to 1% (against 5 so far).
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