Various changes in the Flemish registration fees when purchasing immovable property

The most important change is the increase in the general registration tax rate from 10% to 12%, and conversion of the reduced rate for the ‘sole own home’ from 6% to 3%. Good news for those who are purchasing their first and only home.

Furthermore, from 1 January 2022 you can enjoy a reduced rate of 1% (through 31 December 2021 this is 5%) for the purchase of a sole own home if you as purchaser undertake to carry out major energetic renovation works or to proceed with demolition and reconstruction of the house! Please note: the works must be completed within a period of 6 years (through 31.12.2021 this is 5 years) and you must also register at this address within the same period of 6 years (through 31.12.2021 this is 5 years).

In addition, from 1 January 2022, the reduced rates for the purchase of an immovable heritage change (from 5% to 6%), for the purchase of a sole own home that is a protected monument (rate of 1% remains, but the investment obligation decreases from 5% to 2%), and an additional new rate of 10% for undeveloped country-side or nature properties.

Finally, from 1 January 2022, the principle of portability of registration fees (the ‘backpack’) will disappear. This means that the registration fees paid on residential properties from 1 January 2022 cannot be offset against registration fees that will be owed on real estate purchased at a later date. For homes purchased through 31 December 2021, a transition period is foreseen that ends on 31 December 2023. Registration fees paid for a home purchased through 31 December 2021 can still be settled or reclaimed if a new home is purchased before 1 January 2024.

1) If you signed a promise to purchase and to sell or private sales agreement in 2021, but the notarial deed is executed at the notary in 2022, then you do not have to worry if you wish to apply the new reduced prices.

However, what if you wish to use the old rates and only signed a promise to purchase and to sell in 2021? If the signing of the notarial purchase deed is scheduled for 2022, it is best to visit a notary to sign a private sales agreement. In contrast to the promise to purchase and to sell, the Flemish Tax Service accepts the private sales agreement as a point of reference for the application of the old rates.

2) For the application of reduced rates, you need to take into account that you may not already own other immovable property in full ownership, unless you commit to refurbishing your old house within two years (through 31 December 2021, 1 year) after the signing of the notarial deed.

Able to still make use of the reduced rate but fail to meet the obligation to sell the old home? In this case, the tax authorities will reclaim the difference and you will have to pay a tax increase.

Alternatively, you can opt to pay the basic rate of 12% (until 31 December 2021, 10%) when purchasing the new home and request a refund of the registration tax if you are able to sell the old home within a period of two years (through 31 December 2021, 1 year). This in any case avoids the tax increase.