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Nieuws | What does the new government mean for your real estate?

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What does the new government mean for your real estate?

What does the new government mean for your real estate?

The coalition agreement includes several real estate measures. The federal interest deduction, a tax benefit for loans on a second home or investment property, will be abolished, even for existing loans. Additionally, the government aims to make installing heat pumps more attractive.

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Demolition and reconstruction for property developers

Anyone who demolishes a building and rebuilds a home on the same plot can benefit from a reduced VAT rate of 6% instead of 21%. Since early 2024, a new regulation has excluded property developers from this benefit, although a transition period is in place until June 30, 2025. The coalition agreement now makes this temporary arrangement permanent, allowing property developers to once again qualify for the reduced VAT rate.

The social conditions remain unchanged: the buyer must live in the home themselves and must not own or hold property rights to another residential building.
For professional sellers, the maximum habitable area is limited to 175 m², while private builders can go up to 200 m². Only living spaces are considered; bathrooms, toilets, utility rooms, staircases, storage areas, hallways, non-habitable basements and attics, garages, and annexes are excluded.

 

Incentive for heat pumps

For five years, the government will reduce the VAT rate on the supply and installation of heat pumps to 6%, including in new construction. A similar measure expired at the end of 2024 but has now been extended. Meanwhile, the VAT rate on gas and oil-fired heating systems remains at 21%, while it was previously still 6% for private homes older than ten years.

Definition of renovation and redevelopment

The coalition agreement introduces clear definitions for renovation and redevelopment, which are important for VAT regulations. Renovations of homes at least ten years old qualify for the reduced VAT rate of 6%, while redevelopment is subject to 21%.

Until now, there was no legal definition, and authorities relied on a 1986 administrative circular stating that works must be largely supported by existing load-bearing walls. However, construction techniques and energy standards have changed significantly since then. In practice, VAT inspectors often classify extensive renovations as redevelopment, forcing property owners to pay an unexpected additional 15% VAT, plus penalties and interest.

For property developers, a clear definition is also crucial. They can only deduct VAT on construction costs for (re)development projects, but due to the lack of a legal definition, outdated administrative interpretations still apply. The European Court of Justice has repeatedly ruled that this conflicts with EU VAT regulations.

 

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Federal interest deduction abolished

The federal interest deduction, a tax benefit for loans on second homes or investment properties, will be eliminated. Previously, this deduction reduced the taxable income from real estate, effectively lowering or even nullifying taxation on second homes or investment properties.

The coalition agreement states that federal housing tax benefits will be phased out, and the interest deduction for non-primary residences will be fully abolished. This applies not only to new loans but also to existing ones. Finance Minister Jan Jambon (N-VA) confirmed that the measure will take effect from the 2025 income year, to be declared in the 2026 tax return.

Focus on apartments 

The coalition agreement addresses renovation challenges in apartment buildings. Currently, renovations require the approval of two-thirds of co-owners. For energy-related upgrades, such as solar panels or charging stations, this threshold will be lowered to a simple majority, making energy renovations and the installation of renewable energy sources easier.

Additionally, the government will encourage homeowners' associations (VME) to develop a long-term investment plan for climate-related improvements. This will not be mandatory and differs from a traditional maintenance plan, which mainly focuses on building upkeep. The exact details of this incentive are not yet clear.

Finally, the government will explore ways to make it easier for homeowners' associations to obtain bank loans for energy renovations.

De Tijd (2025, 14 februari). Wat betekent de nieuwe regering voor uw vastgoed?  CIB community. Geraadpleegd op 4 maart 2025.