The government’s plan is in line with the law of 25 November 2021, aimed at greenification of Belgium’s building stock. The adoption of Article 153 as part of the next Finance Code will consolidate and clarify the application of the reduced VAT rate of 6% for combined demolition and reconstruction work. Until now, this system has been scattered between temporary measures (e.g. 32 urban zones, transitional schemes). This reform aims to create a permanent, harmonised and predictable framework for sustainable property transactions.
The existing social conditions remain in place:
Maximum living area: 200 m², with a tolerance of up to 175 m² for certain sales from July 2025.
Single dwelling/principal use: the rebuilt property must be used as the purchaser’s principal residence or must be let to social organisations or individuals occupying the property on a long-term basis.
Prior declaration (form 111): the project owner or developer must notify the tax authorities before the first invoicing.
Invoicing and due date: VAT becomes due on 31 December of the year of completion or on the date the invoice is issued.
From that date, the reduced rate of 6% will apply to :
Developers and individuals selling a rebuilt dwelling (surface area ≤ 175 m², single dwelling).
Investor-renters, subject to conditions: surface area ≤ 175 m² for private rental, no limit if rented via a social company.
The temporary regime (urban areas, permits before 2023) is extended until 30 June 2025.
Declarations 111/3 or 111/4 2025 are still required, and a copy must be sent to each contractor concerned.
In the event of sale to a co-purchaser or co-owner, each owner must comply individually with the conditions (single use, declaration).
Any shortcomings (surface area >175 m², failure to comply with declarations, secondary use) will result in partial recovery of the VAT benefit (proportional refund).
The expected effects are as follows:
Acceleration of urban renewal and creation of affordable housing.
Stimulation of the construction sector, still weakened by delays linked to the COVID and bad weather.
Encouragement of purchases by social investors, to improve the supply of low-cost rental accommodation.
The stages to be envisaged are as follows:
Publication in the Belgian National Gazette on July 29th 2025.
Official entry into force on 1 July 2025.
