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Belgium

Belgium

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KOAN LAW FIRM

1

Restrictions

Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?

Yes. Foreigners can own and occupy real estate and can hold shares in property owning companies. There are no restrictions to the owning and occupying of real estate in Belgium.

Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline? 

There are no legal restrictions as such on the lending for the purchase of real estate by foreign companies in Belgium.

However, the banks themselves can decide to impose restrictions on the lending (for example depending on the country of establishment (within the European Union or Euro Zone or not)), on the purpose of the investment, etc..

The bank will also carry out a check with regard to the respect of obligations int erms of money laundering and terrorism financing.

2

Taxes

Buying

Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.

  • Registration fees :  they vary depending on the region in which the property is located and the cadastral income (the cadastral income is a fictitious income determined by the administration, which corresponds to the average net income that a property would provide to its owner in a period of one year). They correspond to a percentage of the purchase price (12.5% in Walloon Region ; 12.5% in Brussels-Capital Region ; 6% or 10% in Flemish Region).
  • Notary’s fees: Are determined according to a sliding scale of percentages of the purchase price.
  • Administrative and research costs:  the notary must carry out researches on mortgage and taxes, issue certain certificates, send notifications, register the mortgage, research cadastral extracts, etc.
  • Fees relating to the registration of the mortgage (registration fee (1%) and a mortgage fee (0.30%).
  • VAT (21%): applies to the notary's fees and administrative fees; and can apply in case of purchase of a new building or a building under construction.

Owning

Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier - not being the owner)?

  • Income tax: income from real estate which is not taxable as professional or other income. Rents are taxable as such or the rental value when the building is not rented out. It is taxed in the hands of the owner or the holder of a real estate right (usufructuary, emphyteutic lessee or superficiary).
  • Property tax: tax calculated on the basis of the cadastral income, based on a regional rate and a municipal rate. The owner, usufructuary, emphyteutic lessee or superficiary is liable to pay this property tax.
The taxable person is the owner of the real estate, but he can agree to pass the burden of the taxes to someone else, for example, to the tenant in the case of a lease agreement or an emphyteutic lease, with the exception of letting to a tenant who establishes his residence in the building.

Tax Breaks

Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so what are they?

No.

3

Title of Real Estate

How is the ownership of Real Estate evidenced in your jurisdiction?

In Belgium, the ownership of real estate is evidenced by the transcription of the deed of sale and its annexes at the Legal Security Office (Bureau Sécurité Juridique / Kantoor Rechtszekerheid).

Within one month of signing the deed, the notary must deposit it at the Legal Security Office where it is then transcribed in full and made available to the public.

However, the proof of ownership of Real Estate remains free (possession of title or deed, occupancy, acquisitive prescription, etc.).

Is it possible to keep the identity of owners of real estate confidential in your jurisdiction?

No, it is not possible to keep the identity of owners of real estate confidential in Belgium.

Access to the Legal Security Office is public. Anyone can consult against payment of a fee the archives and read the various acts that have been transcribed. This system allows everyone to know who the real owner of the property is.

In fact, the Administration of Measurements and Valuations ('the land register' or ‘kadaster’) is part of the General Administration of Patrimony Documentation of the Federal Public Service of Finance. This administration controls the cadastral plan, gives a number to every parcel and allocates a cadastral income to each property.

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Pierre Willemart
KOAN LAW FIRM
Brussels, Belgium