Real Estate News

Belgium: Recent and expected changes in real estate law as from 1 January 2012

19 January 2012
by Michaël Bollen, Jeroen Gobbin, Mathieu Higny

The beginning of the year 2012 is the occasion to provide an overview of some recent or expected changes in real estate law in Belgium.

Government agreement

The Belgium Government agreement concluded on 1 December 2011, has announced many important changes in real estate (taxation) in Belgium. Below are some highlights.

Notaries are now subject to VAT. According to administrative guidelines sent to the Royal Federation of Belgian Notaries on 28 December 2011, every notary is required to charge VAT. These not only apply to his fees but also to all disbursements, taxes and levies which are recharged to his client, such as the costs for the issuance of a soil certificate (OVAM, IBGE/BIM), the cadastral extracts, but not tp the registration rights and the mortgage rights and fees of the mortgage officer, as the case may, paid by him. The notaries must request a VAT identification number no later than 20 January 2012 and are subject to (in principle) monthly VAT declarations (subject to certain conditions, quarterly declarations are possible). The Royal Federation of Belgian Notaries has however requested a transitional period of six months.

The government also wishes to 'by-pass' the case law of the Supreme Court regarding article 344, paragraph 1 of the Belgian Income Tax Code, ie the anti-abuse rule by virtue of which the Belgian tax authorities are entitled to 'requalify' a transaction divided into distinct transactions so that the 'actual' transaction into which the parties have entered is taxed (with a higher tax burden). According to this case law, such requalification is only possible if the Belgian tax authorities demonstrate that the consequences of the 'new' qualified transaction are similar to the consequences of the distinct transactions entered into between the parties. The government wants the Belgian tax authorities to be now allowed to 'requalify' a transaction without being required to provide this demonstration.

In the same context, it is to be noted that the Ruling Commission has only recently removed from its website its advice on the so-called 'split acquisitions', containing the conditions to be complied with in order that a split transfer of a real estate property (by virtue of the creation of a long lease right in favour of one party taxed at 0.2 % registration tax, followed by transfer of the residuary property rights to another party taxed at 12,5 or 10 % registration tax) should not be 'requalified' as a direct sale of a property taxed at 12,5 or 10 % registration tax in its entirety in accordance with article 18, paragraph 2 of the Registration Code.

Energy performance of buildings

As from 22 December 2011, in the Walloon region, an energy performance certificate has to be displayed, clearly visible and readable to the public, in all public service buildings and in the buildings occupied by public authorities, open to public and with a total useful floor area superior to 1,000 sq. meters. This certificate must be placed at the latest fifteen months after the start of the occupation. With regard to the buildings which were already occupied on 22 December 2011, a transitional measure has been foreseen pursuant to which the certificate should be displayed at the latest fifteen months as from the moment the model of the energy performance certificate for public buildings is available.

As from 1 January 2012 in the Flemish region, any seller or landlord, as well as their mandatories of a residential building, have to indicate the index mentioned in the energy performance certificate together with the unique code of the energy performance certificate or the address of the residential building in any advertisement for the sale or the lease of said building. If this rule is not being complied with, they can be sentenced to a fine for an amount between €500 and €5,000. The Flemish authorities have also announced the further transposition of the regulation concerning the energy performance certification of the non-residential buildings (currently still not applicable).

Co-ownership

By virtue of a law of 13 August 2011, the deadline for bringing the basis deed, the rules of co-ownership and the internal rules in line with the new rules concerning the co-ownership enacted by the law of 2 June 2010 has been extended to 31 August 2013. In addition, it should be noted that a new proposal of law is currently subject of discussion, through which the co-ownership regime would be modified once again among others, by providing that the payment of the administrative costs concerning the convocation of the general assembly must be borne by the association of co-owners or that there is an incompatibility between the function of syndic and the membership in the co-ownership council.

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