VAT rates reduced in real estate sector The Belgian government has decided to reduce the VAT rate for costs incurred on the construction of new private housing from 21% to 6%. This measure is in addition to the recent decree that allows businesses in the real estate sector to obtain monthly (rather than quarterly) VAT refunds. The lowering of the VAT rate from 21% to 6% reduces the VAT burden for the first EUR 50,000 on the construction or purchase of a new private residence.
A series of formalities and requirements must be met to benefit from the reduced VAT rate, the most important of which is that the beneficiary , i.e. owner or buyer must remain domiciled at the residence for five years.
If he/she moves during this five-year period, the benefit must be refunded. It would therefore appear that the reduced rate will not apply to the construction of homes that will be rented. The measure applies only to construction carried out during 2009 prior to the first use of the property, or, in the case of a purchase, if the property has not yet been taken into use on 1 January 2009.
In addition to the reduction of the VAT rate from 21% to 6%, the application of the reduced rate of 6% for the demolition and reconstruction of homes has been extended to the entire country. Finally, the reduced VAT rate of 12% is further reduced to 6% for the construction of social housing. These measures apply from 1 January 2009 until 31 December 2009.
Eco-cheques. In the framework of a collective bargaining agreement, the issuance of eco-cheques granted for the acquisition of products contributing to energy saying, water saving, sustainable mobility, waste management and products without negative impacts on nature were introduced.
The purpose of this measure is on the one hand to raise awareness for ecological products and, on the other, to grant an additional “net benefit” to employees. Under certain conditions, eco-cheques will be exempted from social security contributions. Moreover, eco-cheques can, from a fiscal point of view, be considered as a social advantage for the employee because it means practically an exemption from tax.