Purchasing permanent accommodation in Belgium
In Belgium, foreigners are permitted to buy property and the process is very similar to that of a Belgian. It is necessary to use a real estate agent as well as a lawyer (http://www.notaire.be/ – The site is in French, but under “Acheter, Louer, Emprunter” you can enter your zip code or commune. When you click on the “Details” of the list of lawyers that appears, it will list the languages spoken.) and financing may be obtained from a mortgage institution such as a bank.
Many foreigners do buy property in Belgium, either as they plan to live here for a number of years, or as an investment. Property prices have been increasing in and around the city for several years, though in the last year or so have been stable as a result of the financial crisis. There are certain processes to follow when buying a house, and it can take several months before you are able to move in. If you are seriously looking to buy a property, it is recommended that you have a lawyer before you even start looking as they will be involved in the whole process and can help with any complications and also give advice.
The Purchasing Process
When a buyer identifies a property they wish to buy they can approach the agent responsible for that property, usually listed along with wherever the property is advertised. Below is a list of the major processes involved;
- Often agents and sellers ask the buyer to sign a Aankoopanbod or Koopintenties/Offre d’Achat (commitment to buy) contract that states the buyer is interested in the property but does not bind the seller.
- An option paves the way for the buyer to purchase the property without committing.
- A Verkoopcompromis/compromis de vente (purchase agreement) states the sale is confirmed subject to the buyer receiving the adequate financing, which can take up to a couple of months.
- A deposit is then placed, usually between 5-20% of the overall cost but will be held in escrow by the notaries/lawyers until a notariele akte/acte notarie (notarised deed of sale) is signed.
- An official deed of sale must be signed within four months of the purchase agreement by both parties.
- An arbitration agreement may be signed into the contract so if any problems should arise it will not be necessary to go to court. This may be made in English should both parties agree, or translators may be present to assist.
- Special requirements may also exist depending on certain areas such as pollution analysis, structural evaluations and so on. This is information that will be given by the real-estate agent and they will also inform you as to what needs to be done and which department to contact.
- Protected buildings will also have rules about what changes can be made to the buildings and may also be subject to subsidies for their renovation. More information on these buildings can be found from the Belgian Chamber of Property Experts http://www.cibex.be/
- The mortgage company may require an inspection of the property from an expert valuer approved by them and the cost is paid by the buyer.
Taxes and Fees
- Registration fees and Value Added Tax (VAT) – These fees are decided and paid to the municipality. In most areas of Brussels the amount is 12.5% of the property value, though in some districts, to encourage development they may be lower. VAT is applied only to new buildings or properties that have undergone a massive upgrade/refurbishment. If this is the only property you own, you will receive a rebate on your registration fee.
- Lawyer Fees – These are standard and depend on the value of the property and examples of how much to expect can be found on the Belgium Notaries website.
- Capital Gains Tax – There is no capital gains tax on buildings sold after 5 years if the building was a primary residence, and in some cases even a secondary residence. Should a property be sold before the 5 years, it will be subject to capital gains tax of 16.5%. A local tax of around 1.5% will also have to be paid to the commune.
Mortgages and The Mortgage Process
Belgium has an efficient but complicated mortgage system (Credit Hypothecaire/Hypothecaire Krediet) offering standard mortgages as well offering the opportunity to tailor-make a mortgage. The main mortgage issuers are the banks and generally it is always recommended to go to your own bank first as they may offer favourable rates. The Professional Association of Credit Brokers http://www.apcc.be/ also can provide mortgage assistance and a list of lenders can be found on the website.
The mortgage process involves credit checks, employment and wage history to determine you are able to afford the mortgage payments as well as your regular living costs. Mortgage rates average close to 6%, and shopping around may provide slightly better rates. In total, the price you end up paying for the property with taxes, lawyer and registration costs will be around 17% more than the list price of the property, and it usually takes around four months to complete the process.