In addition to exclusive ownership, other rights in rem (droits réels / zakelijke gebruiktsrechten), which are attached to a property and transferred with it, are granted on real property belonging to someone else. Note that in Belgium, only the rights in rem which are enacted by law can be established (this is the so-called “numerus clausus” principle).
There is co-ownership (copropriété / mede-eigendom) of property if the property belongs to different co-owners. There are two types of co-ownership under Belgian law: forced co-ownership (whereby the undivided property is co-owned because of its nature or use) and conventional (voluntary) co-ownership (whereby the co-ownership exists if the parties contractually agree to hold a property in co-ownership). The co-ownership is governed by the articles of association (including the base deed and co-ownership rules).
Usufruct (usufruit / vruchtgebruik) is a temporary right to use and enjoy a property belonging to the bare owner and to benefit from its profits and/or products, in a prudent and reasonable manner, in accordance with the purpose of that property and with the obligation to return it at the end of the right. A usufruct can be granted on land or (parts of a) building(s), as well as on movable and immovable property. This excludes the right to transfer or demolish the property. A usufruct is a precarious right and automatically expires upon the death of the usufructuary or after 99 years when the usufruct is granted to a legal entity (note that the declaration of bankruptcy and the voluntary dissolution put an end to the usufruct). A contractual deviation from this principle is not permitted (usufruct can never be granted for more than 99 years).
Long leases (emphytéose / erfpacht) can also be granted. It is a right in rem conferring full use and enjoyment of immovable property belonging to someone else, subject to the long-term lessee not diminishing the value of the property. A long lease is normally granted for a minimum duration of 15 years and a maximum of 99 years. Long leases can be renewed provided that the maximum duration of 99 years is not exceeded. There is a possible exception to this: long leases can be perpetual if and as long as they are established for public domain purposes by the owner of the property. The canon (ground rent) is not an essential element of a long lease.
Building rights (superficie / opstal) can also be granted. The right to build is the right in rem which confers (temporary) ownership on volumes, on, above or below the land belonging to someone else. Upon expiry of the building right, the owner automatically becomes the owner of the constructions built by the holder of the building right during the term of the building right. This is the principle of accession under Belgian law (droit d’accession / recht van natrekking). Building rights can be granted for a maximum period of 99 years. If a shorter period has been agreed, renewal is possible, but it cannot exceed the maximum period of 99 years. There is a possible exception to this: the building rights can be perpetual if and as long as it is established by the owner of the land (1) either for purposes of the public domain (2) or to allow the division into volumes of a complex and heterogeneous real estate entity that includes different volumes that can be used independently and diversely do not have a common part. Building rights can be granted free of charge or against a one-off or recurring consideration.
Finally, the right of easement (servitude/erfdienstbaarheid) is an encumbrance vested on a property to the benefit of another property. They can only exist between properties with different owners. They can be perpetual or limited in time. The former are linked to the right of ownership of the property concerned (for example, easements to refrain from building on real estate located next to airports, or to gain access to public roads). Easements can be agreed between the parties or created by prescription, law or the factual situation of properties.
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In Belgium there are no restrictions on foreign investors acquiring property.
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Depending on the location of the real estate, different regional pre-emption rights may apply (eg in relation to vacant houses, in port areas, on real estate situated in nature reserves, or on real estate located in zones where expropriation is likely) mostly in relation to areas designated for housing or next to public ports. Under certain circumstances, pre-emption rights apply to social housing companies and certain public entities. Real estate that is empty or in decay may also be subject to pre-emption rights.
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The Civil Code contains all general provisions connected with property transactions.
The Mortgage Law governs registration with the competent Legal Security Office (Bureau de Sécurité Juridique / Kantoor Rechtszekerheid) when real estate is transferred.
The Registration Tax Code and the Flemish Tax Code govern registration duties when real estate is transferred.
Finally, some regional decrees provide for specific formalities that have to be complied with from an environmental and zoning law perspective.
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No.
However, depending on the location of the real estate, ie the Flemish, Walloon or Brussels Capital Region, different environmental regulations apply. The location will also affect the applicable registration duties regime and the activities that can be conducted on the property according to zoning regulations.
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A sale and purchase agreement comes into existence and is binding on the parties when there is an agreement between the seller and the purchaser on the price and the property sold. This implies that the transfer of title is effective through the mere signature of the sale and purchase agreement. However, the private sales agreement will generally provide that the transfer of ownership over the property shall only occur upon execution of the notary deed.
In order to be binding, vis-à-vis third parties, the public notary who submits the deeds to the Administration of Legal Security must notarize the transfer of title. The transfer of ownership can only be protected against claims by a third party when the deed has been registered in the Administration of Legal Security.
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Yes, real estate is registered in the competent Legal Security Office (Bureau de Sécurité Juridique / Kantoor Rechtszekerheid). . In addition, certain transactions relating to real estate, such as mortgages, leases with a duration exceeding nine years and transfers of rights in rem, are registered in the competent Legal Security Office.
The information contained in the Administration of Legal Security is available to the public.
Yes, transfers of title must be notarized by the public notary who submits the deeds to the Legal Security Office. Other deeds relating to the transfer of title that must be notarized include lease agreements, if the duration is of more than nine years.
Title insurance is unusual in Belgium.
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Deals are either structured as share purchases or asset purchases, i.e. a buyer can either purchase real estate directly or buy the shares in the company owning the real estate.
Share deals are often chosen to avoid registration duties, but have other disadvantages.
Buyers carry out due diligence, which is particularly important for assessing any environmental issues and liabilities. In addition, due diligence provides an opportunity to verify whether there are any liens on the real estate. Due diligence typically takes place prior to the execution of the contract, but the parties are free to agree for it to be carried out afterwards. The contracts will then normally contain specific protection measures for the buyer during the due diligence period, such as an exclusive right to buy.
In a share deal transaction, parties will negotiate a share purchase agreement regarding the shares of the property company. The share purchase agreement is a private agreement that does not have to be notarised. Signing and closing of the share purchase can occur at the same time, but closing can also occur at a later stage, after satisfaction of conditions precent and/or pre-closing items.
In an asset deal transaction, parties will typically sign a private sale and purchase agreement. The contents of the private sale and purchase agreement will then be duplicated in a notary deed. An asset deal must be effected by a deed executed in the presence of a notary public, within four months of the signing of the initial agreement. The deed must be presented to the Administration of Legal Security. The applicable registration duty must be paid within the same four-month period. In Belgium these obligations do not apply to share purchase agreements.
Common elements of contracts for both asset and share deals include a description and identification of the parties and the subject of the contract (ie the real estate or shares being sold), as well as a clear description of the price. A sale and purchase agreement comes into existence and is binding on the parties when there is an agreement between the seller and the purchase on the price and the property sold.
The first stage of an asset deal is the drafting and signing of a private sale and purchase agreement (compromis de vente/verkoopcompromis). Parties can also enter into a preferential agreement (voorkeurscontract / pacte de preference) or option agreement or unilateral promise (optiecontract of eenzijdige contractbelofte / contrat d’option ou promise unilatérale de contrat). Pursuant to a preferential agreement, a party undertakes to give priority to the beneficiary if it were to decide to enter into an agreement. Pursuant to an option agreement or unilateral promise, a party gives the beneficiary the right to decide to enter into an agreement with it, the essential elements of which have already been agreed between the parties.
Finally, parties can also enter into mutual promise of sale and purchase (the so-called cross “call” and “put” options). This is an agreement in which two unilateral commitments, i.e. the promise to sell and the promise to purchase, are mutually agreed upon. First, the promise to sell can be exercised by the purchaser within a certain period of time. If not exercised, the promise to purchase becomes effective and can be exercised by the seller. In principle, the purchase becomes effective when one of the options is exercised.
A share deal only transfers ownership of the company owning or holding the real estate. A notarial deed is not required, and a private agreement is sufficient.
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Buyers usually carry out due diligence, which is particularly important for assessing any environmental issues and liabilities. In addition, due diligence provides an opportunity to verify whether there are any liens on the real estate. Due diligence typically takes place prior to the execution of the contract, but the parties are free to agree for it to be carried out afterwards. The contracts will then normally contain specific protection measures for the buyer during the due diligence period, such as an exclusive right to buy.
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Consent by a spouse may be required when the real estate includes property held by both spouses (ie common property) or if the transaction could affect the interests of the family (e.g. in the case of a sale at less than market value, the spouse could apply to the court on the basis of article 224 of the Civil Code to have the sale set aside). If the family home is being sold, which is owned by one spouse, then the other spouse will also have to agree to the sale.
Consent by public authorities who have certain rights (eg legal pre-emption rights) in respect to the real estate may also be required.
Also note that real estate projects may require authority consent, eg construction, renovation or execution of excavation works require a building permit (permis d’urbanisme / stedenbouwkundige vergunning).
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There are no formal requirements regarding the content and structure of a sale and purchase agreement contract relating to real estate (SPA). The parties are generally free to structure the contract as they wish, except for certain legal requirements. A share purchase agreement does not have to be notarised. The share transfer is effective when the share transfer is recorded in the company’s share register.
If an asset purchase, the agreement is contained in a deed which is formalized in the presence of a notary public within four months of the signing of the initial agreement. Presentation to the Administration of Legal Security and payment of duty is required within the same four-month period. This obligation does not apply to share purchase agreements.
Asset and sale purchase agreement are negotiated instruments between the parties.
Common features of both asset purchases and share purchases include a description and the identity of the parties, details of the real estate or shares being bought and the price. If these elements are absent the purchase agreement is void.
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In the case of an asset deal, the Civil Code provides that all sellers are to guarantee two things. First, they must warrant the unrestricted use of the property to the buyer. This protects the buyer from any restriction on his use of the property by the seller or third parties who claim rights over the real estate. Secondly, they must warrant that the property sold is free from invisible defects (garantie des vices cachés / garantie van verborgen gebreken).
The parties can agree to extend or limit these obligations in the contractual documentation.
Furthermore, specific legislation can impose additional warranties on the seller.
The obligation to guarantee unrestricted use is, in principle, subject to the usual time limit of 30 years. Complaints about hidden defects, on the other hand, must be made at ‘short notice’ to ensure the defect existed when the purchase agreement was signed and did not occur later. The parties can, however, specify a revised deadline in the purchase agreement.
In the case of a share deal, the warranties provided for by law only relate to the shares, not to the real estate which the company owns. In this case, therefore, additional contractual representations and warranties are needed.
Claims following the breach of a legal or contractual warranty have a general time limit of 10 years. However, it is common practice for this time limit to be reduced in the purchase agreement.
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In the case of an asset purchase, the buyer is protected by statutory legal warranties.
The seller must guarantee the buyer free and unlimited use of the real estate, including protection against any disturbance by the seller, or against the seller claiming any rights to the property.
If the warranties are breached, then the buyer can claim compensation or dissolve the transaction (by obtaining a court order).
The seller must also indemnify the buyer against legal action by third parties where the cause of action existed before the contract was concluded (although this can be limited in certain circumstances). If a claim by a third party is successful in these circumstances, then the buyer can claim retrospective annulment (ontbinding / résolution) of the transaction.
In the case of an asset deal, the seller must also guarantee that the property is free from any existing invisible defects which prevent it from being used for the purpose for which it was bought.
The buyer can choose either to dissolve the transaction and receive full reimbursement, or to keep the property and receive a partial reimbursement of the purchase price.
Alternative remedies can be agreed upon by the buyer and seller in the private sale and purchase agreement.
In the case of a share purchase, however, remedies for misrepresentation will greatly depend on the contract. If the misrepresentation has taken the form of fraud, it is possible to apply to court to ask the nullity of the contract. The sale will be null and void. However, proving fraud will be difficult.
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Planning and zoning regulations must be verified. These vary depending on the property’s location. The Flemish, Walloon and Brussels Capital regions have each adopted their own regional zoning regulations. These provide the framework for local/municipal regulations.
Similar regional variations apply to environmental rules (eg each of the three Regions has its own regulatory framework governing the energy performance of buildings)
In the Flemish region, where environmental rules are most developed, all real estate sales generally have to be accompanied by an ‘orientating’ soil survey when certain hazardous activities have been, or are being, carried out. If contamination is found in this orientating survey, a more detailed ‘descriptive’ soil survey must be conducted and this may identify a clean-up obligation.
On 1 March 2018, the Walloon Parliament adopted a Soil Decree which came into force on 1 January 2019. No specific obligation applies in case of asset purchases except the obligation for the seller to provide the purchaser with a soil attestation. The asset purchases themselves do not trigger any other specific obligation than providing the purchaser with said soil attestation.
On 13 May 2004, the Brussels Capital region also adopted a Soil Clean-Up Act. This Act was updated on 5 March 2009, and the update came into force on 1 January 2010; it was further updated pursuant to a decree dated 23 June 2017 which came into force on 23 July 2017. A preliminary soil investigation must be carried out before the transfer of rights to real estate where hazardous activities are being, or will be, carried out. This is also required before commencing or terminating hazardous activities. The person transferring the real estate must bear the cost.
As a result of EC Directive 2002/91 regarding the energy performance of buildings, each of the regions have adopted legislation to increase the energy efficiency of several different types of building. This Directive has been replaced by the Recast Directive (Directive 2010/31/EU of the European Parliament and of the Council of 19 May 2010 on the energy performance of buildings). Among other things the new directive contains stricter building standards. The Recast Directive was amended to some extent by the Energy Efficiency Directive (Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency). The legislation in the regions is being amended in order to comply with this new legislation.
On 22 December 2006 the Flemish region adopted an Energy Performance Decree for buildings. This decree gives the Flemish Government the power to make lists of mandatory energy performance criteria, both for existing and for new buildings, and different lists can be created for different types of building. Furthermore, the decree gives the government the power to introduce mandatory ‘energy performance certificates’. These certificates contain ‘reference values’ for comparing the energy performance of similar buildings and advice on how to increase the energy efficiency of the building in a cost-efficient way. The Flemish Government has made these energy performance certificates mandatory when non-residential, residential and public buildings are sold or rented.
The decree mentioned above, was replaced on 1 January 2011, by the ‘Energy Decree’ of 8 May 2009, which is a very general decree, also containing a chapter entitled ‘Energy performance of buildings’. The principles, explained above, still apply. The Energy Decree was further updated pursuant to a decree dated 24 February 2017 which came into force on 1 April 2017.
The Executory Decree of 19 November 2010 also contains regulations concerning energy performance. Its main purpose is to indicate how energy performance is to be calculated and to indicate the energy performance requirements and the requirements for the interior climate of buildings.
This Executory Decree was amended by the Alteration Decree of 28 September 2012 following European Directive 2010/31/EU. As from 1 January 2014, this Decree requires that newly built buildings for housing, school or office purposes, must generate a certain amount of energy out of renewable energy resources.
On 1 May 2015, the Decree of 28 November 2013 concerning the energy performance of buildings and its Executory Decree of 15 May 2014, came into force.
This Decree and Executory Decree:
On 7 June 2007 the Brussels Capital region adopted its Energy Performance Decree for buildings. The partial amendment of the decree made on 14 May 2009 came into force on 6 June 2009. This decree gives the Brussels Government the power to specify energy performance criteria for new buildings and buildings being renovated, and the power to introduce energy performance certificates. On 19 June 2008 the Brussels Government adopted an Executory Decree specifying that new and renovated buildings used for housing, offices, services and education require an energy performance certificate, with similar content to the Flemish certificates. On 27 May 2010 the Brussels government adopted an Executory Decree specifying the requirement for an energy performance certificate for public buildings. On 17 February 2011 the Brussels government adopted an Executory Decree specifying the requirement for an energy performance certificate for non-residential buildings and an Executory Decree specifying the requirement for an energy performance certificate for residential buildings.
All these Decrees were abrogated by the Decree of 2 May 2013 enacting the Brussels Code of Air, Climate and Energy Control. Books I, III and IV of this Decree, providing for the general principles and specific provisions on air and climate came into force on 31 May 2013. Book II came into force in full on 1 January 2015 (although some articles of this Book came into force on 5 February 2014).
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The regulations concerning responsibility for soil pollution vary between the Flemish, Walloon and Brussels Capital regions.
According to the decree on soil remediation in the Flemish region, the following individuals are liable for carrying out clean-up operations:
The people listed above under (a) and (b) will not be held liable, however, if they can each prove that they did not cause the soil pollution and that the pollution dates from before the time they started their activities or started using the polluted land.
The owner of the polluted land will not be held liable if he can prove that he did not cause the soil pollution, that the pollution dates from before he became its owner, that, at the time he became owner, he did not know of any pollution and that no activity mentioned in the list of hazardous activities has been carried out on the land since 1 January 1993. (This last condition does not apply if the soil pollution is 'historical', ie dates from before 29 October 1995). In this case the Flemish public waste agency (OVAM) will carry out soil remediation.
In the Flemish region, a distinction is made between the person liable for carrying out soil remediation and the person responsible for paying any associated costs. In some cases the person liable for carrying out soil remediation may be able to reclaim the costs from the person responsible for the pollution.
In the Walloon region, the Soil Decree of 1 March 2018 provides for the following two hypothesis:
The Soil Decree of 1 March 2018 also lists some events (in the context of the filing of a building permit, a single permit or an integrated permit for some acts; in case of termination of some environmental activities; in case of soil damage; upon decision of the administration in case of serious indications of soil pollution), triggering compliance with the execution of soil obligations, including the execution of an exploratory soil study and, if necessary, the conducting of a descriptive soil study and further remediation or other measures.
In the Brussels Capital region, the Soil Clean-Up Act of 13 May 2004 imposes the liability for soil remediation on the person who carried out the risk assessment with a view to transferring the real estate or the environmental permit. However, where the pollution has been fully assessed and can be treated accordingly, that person is only held liable for soil remediation in respect of any pollution they have caused themselves.
If those liable for soil remediation have not accepted their responsibilities, the buyer and the Brussels Environmental Agency (IBGE/BIM) can dissolve the transaction.
The owner or user of a building may also be required to comply with other legal regulations, such as health and safety regulations.
The new Soil Clean-Up Act of 5 March 2009, which came into force on 1 January 2010, as updated by the decree dated 23 June 2017 which came into force on 23 July 2017, maintains the liability system described above.
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Depending on the region, different zoning and planning regulations apply and different categories of regulation have been adopted. Zoning regulations and requirements can be consulted by any interested person since they are 'public information'. Uses can only be changed by the regional authority.
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It is possible to enter into a development agreement with a relevant authority, but this is rarely done since these agreements are not easily enforceable. However, public-private partnerships have recently become more common.
The Flemish region was the first region in Belgium to provide a legal body for public-private partnerships (PPPs), with its decree on public-private partnerships of 9 July 2003. Various types of collaboration between public authorities and private partners are possible.
'Public-private joint ventures' allow the public and private partners to develop, finance, build and manage or operate a project and also jointly share the risks that the project entails. In the case of public private concessions, private parties discharge the government's responsibilities, such as the supply of roads, railway infrastructure, school buildings, police stations, prisons and libraries.
Specific legislation on economic (re)development entitles certain local authorities to sell real estate to private partners under specific conditions relating to, for example, employment, authorized activities, etc.
In the Flemish region the Decree of 25 April 2014 on Complex Projects came into force on 1 March 2015. This Decree states that, with regard to projects which are of social and spatial-strategic importance and which require an integrated permit and planning process, the complex project and possible problems can be discussed in a first phase with the public authorities. In a second phase, all alternatives relating to problems detected in the first phase can be discussed with the authorities. In a final stage, the authority will determine the chosen alternative.
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Expropriation of real estate is possible only for reasons of public interest. There are strict criteria that need to be fulfilled in the relevant procedures. There is a 'normal procedure' and an 'urgent procedure' before the civil courts, that is most commonly used), each procedure involves compensation for the owner.
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In the case of an asset purchase, registration duties (registratierechten/droits d’enregistrement) or VAT (Belasting over de Toegevoegde Waarde (BTW)/Taxe sur la Valeur Ajoutée (TVA)) may apply.
The transfer of ownership, or the setting up or sale of a usufruct (a right to use the property concerned and to benefit from its profits and/or products) over an asset located in Belgium, is subject to a 12.5% registration duty. From 2022, a distinction is made in the Flemish region between the purchase of the only owner-occupied home (where the registration duty is reduced from 6% to 3%) and the purchase of a home other than the only owner-occupied home (where the registration duty is increased from 10% to 12%). The registration duties are calculated on the contractual price or the market value, whichever is higher. In some circumstances, and provided that certain conditions are met, a reduced registration duty rate applies to purchases by corporate entities or individuals whose business activities mainly consist of buying and selling real estate.
The granting of a long lease or a building right may serve as an alternative to acquiring the ownership of a real estate asset. These rights can be granted for a very long period (see above). When not subject to VAT (see below), the granting of these rights is generally subject to a registration duty of 2%, calculated on the total price and any charges imposed on the lessee or the beneficiary of the building right. In certain circumstances, the establishment of long leases and building rights might be deemed by the tax authorities to constitute a sale by virtue of anti-abuse measures. The normal 12.5% (10% in the Flemish region) duty is then payable on the market value of full ownership.
A contribution in kind of an interest in real estate into the share capital of a Belgian company, or the transfer of such property through a merger or demerger, is generally not subject to normal registration duties or to VAT (only a fixed duty of €50 is payable upon registration of the notarial deed). This also applies to the acquisition by a company of a wholly-owned subsidiary (the simplified merger procedure). An exception is made for buildings designated for private residential use, if the contribution is made by an individual (a 12.5% or 3% or 12% in the Flemish region depending on whether it concerns the purchase of a only owner-occupied home or the purchase of a home other than the only owner-occupied home, registration duty is payable).
The transfer or grant of real rights over ‘new buildings’ can be subject to VAT (generally at 21 percent). A newly constructed building is considered to be ‘new’ for VAT purposes until 31 December of the second year after it is first put to use (this also applies to renovated buildings which have been structurally modified or which have been given a new designation or function).
The purchase of land belonging to a ‘new’ building, is subject to the same VAT treatment as the purchase of the new building, if that land and the new building are sold simultaneously by one and the same owner. No VAT is due on the part of the price attributable to the land if the building is not new or if these conditions are not met. Registration duties will, however, then be payable on the sale of the land at a rate of 12.5%. From 2022, a distinction is made in the Flemish region between the purchase of the only owner-occupied home (where the registration duty is reduced from 6% to 3%) and the purchase of a home other than the only owner-occupied home (where the registration duty is increased from 10% to 12%).
In the case of a transfer of a going concern by means of a sale, contribution or otherwise, no VAT will be due on the transfer of the property (although in some cases registration duties may apply). In addition, even where the property does not qualify as a ‘new building’, there will be no effect on input VAT incurred by the transferor which has previously been reclaimed, since in such cases the transferee will be deemed to assume all the rights and liabilities of the original owner.
Costs include the fees of professional advisors and some documentary duties. A notarial fee (determined by law) of between 0.057 percent and 4.56 percent (+ 21 percent VAT) of the transfer value of the property is payable. Other costs include the fees of professional advisors, as well as stamp duty on the notarial deed. A documentary duty must be paid to the notary public before the deed is registered.
All costs related to the notarial deed (such as transfer taxes) are the responsibility of the buyer. The parties may however agree that the seller will bear this cost instead.
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In principle, share purchases are not subject to any indirect taxation, whatever the assets held by the company. Anti-abuse rules should not, as a general rule, affect share purchases. Exceptionally, certain share deal structures could possibly fall within the scope of these measures.
The only costs include the fees of professional advisors. There are no registration duties.
In principle, both parties pay their own costs.
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What are the buyer's remedies against misrepresentation by the seller of real estate?
In the case of an asset purchase, the buyer is protected by statutory legal warranties.
The seller must guarantee the buyer free and unlimited use of the real estate, including protection against any disturbance by the seller, or against the seller claiming any rights to the property.
If the warranties are breached, then the buyer can claim compensation or dissolve the transaction (by obtaining a court order).
The seller must also indemnify the buyer against legal action by third parties where the cause of action existed before the contract was concluded (although this can be limited in certain circumstances). If a claim by a third party is successful in these circumstances, then the buyer can claim retrospective annulment (ontbinding / résolution) of the transaction.
In the case of an asset deal, the seller must also guarantee that the property is free from any existing invisible defects which prevent it from being used for the purpose for which it was bought.
The buyer can choose either to dissolve the transaction and receive full reimbursement, or to keep the property and receive a partial reimbursement of the purchase price.
Alternative remedies can be agreed upon by the buyer and seller in the private sale and purchase agreement.
In the case of a share purchase, however, remedies for misrepresentation will greatly depend on the contract. If the misrepresentation has taken the form of fraud, it is possible to apply to court to ask the nullity of the contract. The sale will be null and void. However, proving fraud will be difficult.
Last modified 22 Mar 2024