Announced increase of registration duties on long lease rights and building rights


On 29 March 2013, the government members have reached an agreement in the framework of the Budgetary Control 2013.

Increase of registration duties

One of the measures impacting the real estate sector is the increase of the registration duties from 0.2% to 2% on the granting of long lease rights and buildings rights (0.5% for non-lucrative associations). For the time being, it is not yet known as from which date this increased rate would apply.

In the absence of any text of proposal of law available, it is currently difficult to interpret this new tax measure:

  • Is this rate change aimed at increasing the proceeds of the Belgian State on the set-up of pure long lease structures (e.g. long lease right for a period of 99 years) with payment of the reduced registration duty of 0.2% (instead of 12.5%/10% in case of acquisition of full ownership of the real estate)? Since the implementation of the new anti-abuse measure last year rendering the typical split sale structures (i.e. acquisition of the long lease and the bare ownership by two separate companies of the group resulting in an average registration duty below 1%) obsolete, some investors were seeking to only acquire the long lease right as an alternative to the classical split sale structures.
  • Or, on the contrary, does this mean that the so-called classical split sale structures will again become possible as the aggregate registration duties on the split sale (and hence the proceeds for the Belgian government) would increase?

To be continued …

Finally, please note that the fixed registration duties for notary deed will be increased from EUR 25 to EUR 50.

Other New Tax Measures

By clicking here, you will be redirected to the PwC Financial Services Newsalert summarizing the other announced Belgian tax measures.