Buying Property in Belgium

Buying property is not considered an important investment in Belgium. Like most countries, property prices have witnessed a boom but since the 90's there has been a slow down on this front. Besides this, spiralling costs in respect of transfer charges have discouraged most people from buying their own homes. Property in Belgium is cheap by UK or US standards but the fees, charges and deposits that buyers have to shell out are relatively higher. If you do manage to procure a mortgage, be prepared for no income tax relief. It is also important to note that selling a property within five years of buying it attracts capital gains tax. This is probably why you would be better off renting a home instead of buying one, especially if you are planning to stay here for five years or less.  

Real Estate Market 

Property for sale in Belgium is usually advertised in newspapers and through real estate agencies. Those in search of a home by themselves can look out for the ‘For Sale' (à vendre/te koop) signs on available properties. Listed prices are by and large negotiable and buyers may make an offer which is below the listed price. Whether the offer is accepted depends on the urgency for sale and seller's approach. Although you may decide to go about the entire process of looking for and buying a property yourself, having an estate agent (despite being an additional expense) to assist you can make the process easier to handle.

Expats looking to rent out a room can expect to pay 200 to 390 euros for monthly rent in a one bedroom flat with an attached bathroom. Those who are looking for a larger-sized property will find that monthly rent for a 2-bedroom flat with furnishings will cost 800 to 1,200 euros, while a 3-bedroom flat will cost 750 to 1,600 euros.

Costs Likely To Be Incurred

Buying property in Belgium involves the following costs:

1. When the buyer likes a property, he must secure it by paying a non-refundable deposit equal to 10% of the purchase price. 

2. The actual transfer of property is executed by a notary who charges a fixed fee of 1-4% of the purchase price.

3. Survey of the property is advisable and will cost around €100.

4. Registration of sale is 12.5% of the purchase price.

Thus, the total transfer fees add around 15-20% to the price of the property, and 21% VAT is applicable in the case of purchase of a new home.

Tax Liabilities/Benefits

When handling property, expats will need to know that there is no mortgage relief in income tax and that the sale of property within five years attracts capital gains tax. A 21% VAT is applicable in the case of purchase of a new home.

Documentation

When dealing with the purchase of property in Belgium, the most important document is the sales agreement (compromis de vente) which must be signed by both the buyer and the seller.

Procedure

Once the buyer likes a property he makes an offer on it. If the seller accepts the offer, both parties sign a sales agreement (compromis de vente). At this point, the buyer must pay a non-refundable deposit equal to 10% of the purchase price. After this, the buyer has four months on hand to obtain the balance of the amount due and/or secure a mortgage. If the buyer would like to buy time, then it is possible to purchase an option on the property for the period which will prevent the seller from selling it to someone else. In case the buyer is unable to fulfil his commitment or backs out of the deal, the option payment is forfeited. The actual transfer of property must be done by a notary (notaire/notaris). Property can also be purchased at auctions in which case the notary fees are doubled and the buyer has one month to secure a mortgage and complete the transaction.

Mortgages

Mortgages in Belgium are fairly easy to secure with banks and financial institutions offering a gamut of options. Common banks in Belgium that expats may visit to inquire about mortgage options include ING Belgium, BNP Paribas Fortis and KBC Bank Belgium. To open a bank account in any of these banks, the requirements needed are a passport and a Belgian ID Card as proof of identity, along with proof of residence.

If you want more information, you can visit :

Moving to Belgium