by Dries Torreele
From 1 January 2024, changes have been introduced to the VAT rate on the demolition and reconstruction of private homes.
Previously, the 6% rate could only be applied to renovations of homes older than 10 years and to demolition and reconstruction in 32 central cities. From 1 January 2021, the scope has been extended to allow the 6% rate to be applied to demolition and reconstruction outside the 32 central cities. However, this was subject to the following strict conditions:
Demolition and reconstruction is done by the builder;
The property is rented for 15 years as part of a social policy; or
The property must have been used as an own and only home for at least 5 years;
The property has a maximum surface area of 200m².
This measure also applied to property sales, allowing developers to sell demolition and reconstruction projects with a 6% VAT rate. This extension initially applied to 2021 and 2022, but was eventually extended to 2023. However, a new regime will apply from 2024.
One system for demolition and reconstruction at 6% VAT remains in force throughout the territory. This only applies to:
Private individuals who use the property (with a maximum area of 200m²) as their only residence for at least 5 years. Property developers will therefore no longer be able to sell demolition and reconstruction projects at 6% VAT.
Individuals and companies renting out the property (with a maximum surface area of 200m²) for 15 years as part of a social policy.
In addition, two specific transitional measures are foreseen for the year 2024:
Individuals who have purchased a property from a developer will be able to keep the 6% VAT rate for invoices received in 2024, provided that the building permit for the demolition and reconstruction was submitted before 1 July 2023.
Individuals and companies who have submitted a building permit for demolition and reconstruction before 1 January 2024 can continue to benefit from the 6% VAT rate in the 32 central cities for invoices received in 2024 under the old conditions.
In our opinions, we rely on current legislation, interpretations and legal doctrine. This does not prevent the administration from disputing them or from changing existing interpretations.
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