Purchase a Property in Belgium

Although purchasing a property in Belgium is a process that can take some time and implies a number of steps and paperwork, some Belgian residents tend to prefer to purchase their own home when possible, rather than renting properties. Personal preference and the field in which they work may have an impact on this decision. Similarly, business owners in Belgium may prefer to purchase a property that will be used as the headquarters for the company, as opposed to renting an office space or a building. 

• • One: the buyer must sign a purchase commitment, therefore he will officially be tied to the sale. However, the seller can back out of the deal without penalty. 
• • Two: concluding the sale agreement where the details of the contract are listed. This is the stage when usually a deposit is required.
• • Three: the notarized deed, it transfers the ownership of the property and it must be signed no later than four months after the sale agreement has been made.
• • Four: this step includes the registration of the transfer deed in the Land Registry. One of our lawyers in Belgium can help you during this stage.

The purchase contracts signed in Belgium are written in either Dutch or French, but it is mandatory for the signatories to completely understand the details of the contract. Therefore, translation services may be needed in order to explain the contract. When a translator or interpreter is hired, the respective costs will be handled by the buyer. Likewise, all of the costs related to translating his personal documents into Dutch or French will be included in the overall costs for property purchase.

 

 A purchase commitment can forgo the sale/purchase agreement and even though this is not a mandatory document, it is often requested by real-estate agents from the buyer as it binds him to the respective property. In some cases, a small deposit or holding fee is requested, and if the respective purchaser decides to back out of the sale, the amount will not be returned. However, the deposit is not mandatory. Exit clauses are also included in most cases, and they stipulate that the agreement can be dissolved without penalty if the buyer is unable to secure a mortgage or if the property has significant damage. All of these terms, the existing clauses and the purchase commitment will differ from one case to the other and will depend on the real estate agency with which the buyer chooses to work and on the preferences of the seller, if applicable.

 

Each transaction must be made in the presence of a notary and his fees are fixed by the state as a percentage of the selling price of the property. Registration fees apply after the property has been registered at the registry office within four months from the completion of the sale.

 

Deposits must be paid into an escrow account or can be held by a notary. The fee settles at approximately 10 percent of the purchase price. 

 

As for mortgages, the respective provider requests a professional evaluation of the property, not a structural survey. In this way, an estimation of the property value of the will be made. In terms of rates, they can be both fixed or variable, and loans are usually granted for a 10 years period or more. The cost of the monthly mortgage does not have to be higher than a third of the monthly income. However, in many cases the rent fees can be higher than the mortgage rates.

 

1. Valuation costs: the valuation expert will charge a fee of approximately 200 euros for a valuation (useful for finding out the real value of the property). 
2. Filing fees: these apply to those who make a home loan application and are paid to the bank, at its price scales.
3. Deed registration fees: these are payable to the notary and include those for the mortgage deed.
4. Notary fees: these include the costs for the notarized deed and any additional costs for translations, as needed.
5. Stamp duty: this is a tax that applies throughout the country and varies according to region.

For more information related to taxes in Belgium please reach out to us for legal advice and consultancy.

 

The VAT cost is also one to take into consideration for new properties in Belgium, apart from the property tax. As far as the property tax is concerned, the percentage is set forth by the three regions in the country, for example, it can be a certain amount for houses located in the Brussels-Capital Region compared to those in the Flemish Region. For newly constructed real estate, the property tax does not apply for the first year of occupation.

 

Some deductions from the property tax can apply in selected cases. Some planned reductions in the Brussels-Capital region can include those for modest houses, those for individuals or children who are disabled (or if the head of the household is a war invalid) when the property is a classified one as well as in several other cases. The reduction percentages differ, with valued of 10%, 20%, 25% and others depending on the type of reduction. Two types of situations in which these reductions do not apply are when the building is a non-profit one (an education center, a healthcare organization, etc.) or when the immovable property is owned by a public international organization or by a foreign state. One of our lawyers in Belgium can give you more information about the applicable tax law and the available reductions in particular cases.

 

For more information regarding purchasing a property in Belgium or any other legal issue please contact our law firm in Belgium.