Registration duties 2023: what are the changes?

If you are planning to buy or sell a property in 2023, you should be aware of the changes in registration fees. These changes have an impact on the property market and may affect the price of property. This blog post will tell you everything you need to know about registration fees in 2023.

Introduction

When buying or selling property, registration duties apply. Registration duties are a form of tax that must be paid when buying or selling a home or other real estate. In Belgium, registration duties are regulated regionally and the rates can vary by region.

In 2023, some changes are planned regarding registration duties. It is therefore important to be aware of the current situation if you are planning to buy or sell property in 2023. In this blog post, you will read what applicable rates and conditions are and what impact they will have on the property market.

 

What are registration fees?

Registration duty is a tax to be paid when buying or selling property. This tax is calculated based on the purchase price of the property and is usually paid by the buyer. Registration duties are a form of indirect tax levied by the government and designed to support the budget.

In Belgium, registration fees are regulated regionally. This means that rates vary by region. For example, different rates apply in the Brussels Capital Region than in Flanders or Wallonia.

 

An overview of registration fees in 2023

In 2023, there are no major changes in terms of registration fees. Rates still vary by region, so it is important to know what rates apply specifically to your region:

• Registration fees in Flanders

In Flanders, the rate of registration fees was reduced from 6% to 3% since 2022. This applies to all properties bought as sole owner-occupied homes. This reduction is intended to make the purchase of a home more accessible to more people.

A reduced rate will also be introduced for the purchase of a modest home. By modest home, we mean a home undergoing major energy renovation (MER) or demolition and rebuilding. This rate will then be only 1%.

For the purchase of a second residence, the rate increases from 10 to 12% since 2022.

In 2023, you can still use portability. This means that you can deduct the registration tax you paid on your previous residence from the tax due on your new residence. However, this is not combinable with the reduced tax of 3 or 1% in any case. The portability system is being phased out and will be completely abolished from 1 January 2024.

• Registration duties in the Brussels-Capital Region

In the Brussels-Capital Region, there will be little change to the rates of registration duties. The rate remains 12.5% for the purchase of a property.

However, some tax breaks will be introduced for people buying a property in the Brussels Capital Region. For example, an "abattement" will be introduced. This is an exemption from registration duties an amount up to €175.000,00. Above this amount, registration duties of 12.5% will apply. This scheme only applies to properties whose selling price does not exceed €500.000,00.

• Registration duties in Wallonia

In Wallonia, registration duties are 12.5% but can be reduced to 5 or 6% in some circumstances. Only the purchase of a modest property qualifies for this reduction and depends on some conditions.

In addition, in Wallonia there is also an abatement of €20.000,00 on the registration duties payable, whether they are 12.5% or 6%. In this way, the Walloon government encourages home ownership. However, the abatement on registration duties is also subject to certain conditions in this case.

 

 

Impact on property market

Registration fees may have an impact on the property market. In Flanders, the reduction of the sole owner-occupied home rate may allow more people to buy their own home, or at least consider doing so. This could lead to an increase in demand for housing and possibly a rise in prices. The special reduced rates for modest homes could also potentially attract buyers for these properties and encourage thorough renovations, benefiting the ageing patrimony in Flanders.

In Wallonia, the reduced registration duties on modest houses could lead to a similar predetermined result.

In the Brussels-Capital Region, the abatement should in turn improve the affordability of supply. There is no explicit lower rate here, but a full exemption up to €175.000,00. It is a task for the prospective buyer to make the calculation and compare the advantage of the abattement or reduced rates against each other by region.

Conclusion

If you are planning to buy or sell property in 2023, it is important to be aware of the current state of registration fees. The applicable rules and rates vary by region. The impact on the property market can vary by region and can lead to an increase or decrease in housing demand and prices.

If you want to know more about registration duties in your region, it is best to contact a notary or a tax advisor. When buying or selling your home, do you want to make sure you are up to speed with current legislation and its implications? Then consider seeking professional help and get assistance from one of our estate agents. They can give you timely advice on the specific rules that apply in your area and help you make the right choices when buying or selling property.