From 1 January 2021, the federal government will introduce an important new tax incentive on the tax obligations for the construction sector with a reduced VAT rate of 6% being placed on the demolition and reconstruction of homes.
This is a temporary measure and will run from 1 January 2021 to 31 December 2023.
At Ciril, we strongly believe in upgrading existing neighbourhoods. This is why we have many demolition and reconstruction projects in progress; these are:
in Mechelen, Maarten
in Brussels, Auguste
in Hasselt, De Bonnefant
in Hasselt, Hastrid
in Diest, Ezeldijk
These projects are therefore eligible for the reduced VAT rate if both the buyer and the property meet the conditions*.
Conditions
• The new project replaces a demolished building
• The home purchased must be your sole and owner-occupied home for at least 5 years
• You buy as a natural person, not as a company
• The habitable surface area must not exceed 200 m²
Should these conditions be met, you may have a chance to enjoy this enormous saving, which can amount to tens of thousands of Euros.
For example:
The purchase price of an apartment always consists of the price for the land and the price for the construction. To illustrate this example:
| Cost of land: | €90,000 |
| Cost of construction: | €360,000 |
| Purchase price for the apartment: | €450,000 (= sum, excl. costs) |
Purchase price including costs (excluding notary fees) is calculated as follows:
| Before the new VAT rate | After the new VAT rate | ||
| Cost of land: | €90,000 | Cost of land: | €90,000 |
| 10% registration duties on the land: | €9.0000 | 10% registration duties on the land: | €9.0000 |
| Cost of construction: | €360,000 | Cost of construction: | €360,000 |
| 21% VAT on the cost of construction: | €75,600 | 6% VAT on the cost of construction: | €21,600 |
| Sum: | €534,600 | €480,600 | |
The advantage for the buyer under the new VAT rate is therefore:
€54,000 !! (534,000-480,600)
Do you have any questions, or would you like more information?
Please do not hesitate to contact us.
