Demolition and reconstruction - extension of the permanent scheme (since 1st January 2024)

What does this extension of the permanent demolition and reconstruction scheme involve?

This involves clarifying and extending the scope of long-term rental of residential property provided for in the permanent scheme since 1^st January 2024 and introducing a new situation allowing the project owner to apply the reduced VAT rate of 6 %.

This rule has been in effect since 1^st June 2024.

More information

Circular 2024/C/73

Do I, as the project owner/buyer, have to file a declaration if I want to apply the extended permanent scheme, and if so, which one?

Yes, depending on the purpose of your rebuilt residential property, you must submit declaration Nos. 111/1, 111/2, 111/3 (you as the buyer as well as the seller ⁽¹⁾), 111/4 or 111/5.

⁽¹⁾ Although the administration has made available a new declaration No. 111.3/2024 with an annex, the following will be accepted:

• The seller of a residential property who, in 2024, refers to the transitional scheme for the application of the reduced VAT rate - pursuant to the new heading XXXVII, § 3, of table A of the annex to Royal Decree no. 20 - files a new declaration 'formulaire/form 111.3/2024'. The administration accepts that the buyer's declaration, which must be attached to this declaration, may be the same as (or a copy of) the declaration that the buyer has already signed previously within the framework of the application of the transitional scheme set out in Article 1c(3) of Royal Decree No. 20, and which has already been sent to the administration.
• The seller must, however, add to this declaration the number which has been allocated following the filing of the initial declaration No. 111/3, as well as the date of filing.

Naturally, this procedure can only be accepted if the information and the conditions fulfilled in the buyer’s initial declaration have remained unchanged.

The administration has also made available a new declaration No. 111/5-1^st June 2024 (in the case of direct long-term rental of residential property to a natural person) and a modified declaration no. 111/2-1^st June 2024 (in the case of long-term rental of residential property for or through certain social organisations).

All these declarations must be filed via MyMinfin.

Further information on this subject will be provided in a subsequent circular.

Note - The tolerance relating to the filing of the form No. 111/5-1^st June 2024 ended on 31^st August 2024. This allowed the service provider to apply the reduced rate on the invoice even though the form No. 111/5-1^st June 2024 was not yet available and if the following statement appeared on the invoice: ‘Application du taux de TVA de 6 % pour la démolition et la reconstruction d’un bâtiment d’habitation destiné à la location privée de longue durée (nouvelle rubrique XXXVII, § 4 , du tableau A de l’annexe à l’AR n° 20 du 20.07.1970 fixant les taux de TVA - nouvelle mesure permanente à partir du 1^er juin 2024) / Application of the VAT rate of 6 % for the demolition and reconstruction of a residential property intended for long-term private rental (new heading XXXVII, § 4 , of table A of the annex to Royal Decree No. 20 of 20.07.1970 determining the VAT rates - new permanent measure as from 1^st June 2024)’.

The project owner had to send the number of the acknowledgement of receipt of 111/5 - 1^st June 2024 to the service provider(s) as soon as the form could be filed via MyMinfin.