Reduced VAT Rate for Home Demolition-Reconstruction Extended, Excludes Developers


The Belgian government has announced an extension of the reduced 6% VAT rate for the demolition and reconstruction of homes. However, this benefit will now exclusively apply to individual homeowners.

Developers, who previously enjoyed this rate under certain conditions for the sale of apartments and homes, will revert to the standard VAT rate of 21% starting January 2024. For projects with permits submitted prior to July 1, 2023, the reduced rate should still be applicable. A transitional phase for ongoing projects is anticipated, although specific details are pending.

Additionally, the reduced 6% VAT rate will now be subject to stricter conditions in 32 specific cities under the old rules. Projects must now adhere to criteria such as unique habitation and a maximum habitable surface area of 200m² to qualify for the reduced rate.

Developers should closely monitor forthcoming detailed regulations to evaluate the financial and commercial impact on both existing and planned projects.

For any further questions or insights, please contact the PwC Real Estate team.