The reform of the Flemish stamp duties

In its September statement, the Flemish government announced a significant reduction in stamp duties, at least for the purchase of the first home. This reduction is immediately compensated by an increase in other situations. An overview.

Reduced rate

As from 1 January 2022, stamp duties will be due at only 3% (instead of the current 6%) for those who purchase a sole owner-occupied home in full ownership in the Flemish region. The stamp duties on the transfer of real estate depends on the region where the real estate is located. Residents of other regions or even other countries, who can demonstrate that they meet the conditions, can benefit from this reduced rate.

In the first instance, it must be your only home.
If you already own another house or even a building plot, you cannot benefit from the reduced rate, unless you engage to sell that other house or the building plot within a certain period of time after the notarial deed has been passed. That period is 2 years. If you do not engage to do so, you will pay the standard rate. If afterwards it turns out that you have sold the other real estate in due time, you can still apply for the reduced rate.
Even if an expropriation is imminent and you demonstrate that you are buying a home because the other home has been or will be expropriated, you can benefit from the reduced rate for the sole owner-occupied home.

It should also concern a house, which means that the building is used to house a family or a person: building plots are therefore excluded.

You must also purchase the house in your own name. A purchase through a company is excluded. Conversely, owning real estate through a company does not prevent the application of the reduced rate (unless the tax authorities can demonstrate that you have explicitly set up a construction for this).

Finally, you must occupy the house within three years of the purchase.

If you applied for the reduced rate and, in retrospect, you have not complied with the conditions, the standard stamp duties, plus a 20% penalty, will be due.

It can be even better

If you engage into a major energy renovation of the home when you purchase it, you can even benefit from a rate of only 1%. Currently, there is a lower rate for energy renovation, but that is still 5%.

The conditions for that reduced rate remain the same as before: you get 5 years to obtain a qualifying energy performance certificate and you also get 5 years to move into the house. Please also note: this rate of 1% only applies to the sole owner-occupied home.

However, there is a first flip side to the coin: if you buy a house for a price under 200.000 (in certain cities under 220.000), you currently receive a discount of 5.600 (or 4.800 if you obtained the reduced rate for energy renovation). But those discounts for modest homes will be reduced to 2.800 and 960 respectively on 1 January 2022, even though the limits are raised to 220.000 and 240.000 respectively.

Rate increase

If it does not concern the only owner-occupied home that you will occupy yourself, the stamp duties will increase as from 1 January 2022, from 10% to 12%. This should reduce the pressure that investors place on the real estate market, and more specifically on the housing market. After all, they have to pay an additional 9% tax, compared to people who want to buy the same home as a sole owner-occupied home.

Seemingly, but from the available information it cannot yet be concluded with certainty, the rate increase from 10% to 12% would not only relate to residential properties. This would mean that companies that do not buy a home, but a commercial or logistics building or office building, will also have to pay an additional 2% tax.

Portability

The Flemish Region currently has a system of 'portability' of stamp duties. If you buy a home and later sell that home to buy or build another home, you set off the stamp duties you paid on the first purchase against the stamp duties on the second purchase. The initial stamp duties can even be refunded.
Important limitation: the amount of the portable stamp duties is limited to 13.000.

However, this portability will disappear in 2024. You can therefore still use it until 31 December 2023.

Additionally, the reduced rates of 3% or 1% can no longer be combined with portability. After 1 January 2022 and until 31 December 2023, you will therefore have to choose between the 3% rate (possibly 1%) without portability on the one hand, or the 6% rate (possibly 5%) with the option of portability of the stamp duties.

Anyone who has to pay 12% (now 10%) stamp duties can also benefit from the portability of these stamp duties. Up to 31 December 2023. Afterwards, that will expire.

Building plots

Anyone who buys an existing home makes a profit without a doubt. On the other hand, anyone who buys a building plot, or who buys a new building (with VAT) loses under this new regime. After all, from 1 January 2022, the stamp duties on the building plots will also increase from 10% to 12%.

As from 1 January 2022

The rate reduction applies to transfers for which the authentic deed is passed after 1 January 2022.

Anyone who wants to buy a first home will therefore tend to postpone the authentic deed until next year. Note, however, that if a promise has been made, the agreement must be registered within four months. And revising an existing sales agreement to postpone the notarial deed to the next year is considered abusive and can be ignored or even sanctioned by the tax authorities.

The rate increase, on the other hand, applies to transfers for which the purchase agreement – a promise – is concluded as from 1 January 2022. Anyone who wants to invest in a second home should therefore not have the authentic deed passed quickly. If the promise was made in 2021, the 10% rate will still apply.