Belgian tax regulations can be daunting for a newcomer or even established expat. However, while complicated and extensive, there are also many tax advantages. At the annual Expat Financial Affairs in Brussels earlier this week, organized by the British Chamber of Commerce in Belgium, several financial experts from the Belgian investment community held seminars to a large audience of expats residing in Belgium. The event, held in partnership together with BNP Paribas Fortis and The Fry Group, covered topics ranging from investment planning, capital gains tax, real estate acquisitions and life insurance.
For many of the attendees, one of the most popular session related to information on property acquisitions; from registration fees, interest rates, taxes, loans and special conditions and perks.
The Belgian real estate market has seen an increase in property acquisitions in recent years. In 2017, 329,000 real estate transactions were made, up from 326,000 in 2016. The average price per square meter in all Brussels is around €3,200, compared to €14,900 in London, €9,400 in Stockholm and €9,800 in Paris.
The current low interest rates can be attributed as one major factor for the many property deals. At a variable interest rate of 1,89% and 2,09% fixed, loans come at a cheap cost.
One of the speakers at the event, Philipp Bollen, Head of Estate Planning at BNP Paribas Fortis, outlined the bank's practice in issuing loans to potential new home buyers. The bank's willingness to issue a loan is directly related to the repayment capacity and a person’s monthly income. In general, banks target a debt to income ratio not higher than 33%. However, the bank can also take a guarantee on other properties that a person may own, which can then even lead the bank willing to give a 100% loan on the house.
On top of the agreed market price of the house, registration, notary and administration fees also apply. As an example, for a house with an agreed negotiated purchase price of 500,000 EUR, 62,500 EUR will be added on as registration fees, 3,135 EUR as notary fees and 1,551 EUR as administration fees, totaling 67,186 EUR, or 13,4% on top of the purchase price - not an insignificant sum. Exceptions exist, and registrations fees are not applied if it is the buyer’s first purchase for example, and he/she intends to live there for five years following the transaction.
Although the Belgian real estate market is currently on an upward trend, the governor of the National bank, Jan Smet, thinks the Belgian residential property market is overvalued by 7%.
J. Apelblat
The Brussels Times
