Demolition and reconstruction - permanent measure (since 1st January 2024)

A new permanent demolition and reconstruction scheme has been launched, composed of two distinct cases.

What does the new permanent demolition and reconstruction scheme involve?

Since 1st January 2024, a new permanent scheme relating to demolition and reconstruction has been  implemented, which is in fact composed of two distinct cases:

  • Demolition of a building and reconstruction of a residential property by a project owner -  natural person who will himself/herself occupy the new residential property (in this case, social criteria apply concerning surface area, sole and own residence and domicile requirement (to be observed for a minimum period of 5 years). See Circular 2021/C/18.
  • The demolition of a building and reconstruction of residential property by a project owner, being a legal entity or a natural person, who intends to rent out the new residential property within the framework of social policy for a minimum period of 15 years.

In both cases, therefore, it concerns provisions of services, i.e. construction work consisting of the demolition of a building and the reconstruction of a residential property. This does not apply to the delivery of a rebuilt residential property (sale of a completed residential property or sale of a residential property under construction).

Two transitional measures have also been provided for projects launched before 1st January 2024.

This new scheme is commented in Circular 2024/C/30 relating to the reduced VAT rate applicable to the demolition and reconstruction of residential property throughout Belgium, Circular 2024/C/32, of 08.05.2024, relating to the new scheme for the application of the VAT rate of 6 % for the demolition and reconstruction of residential property and Circular 2024/C/35 erratum 2024/C/32, of 22.05.2024, relating to the new scheme for the application of the VAT rate of 6 % for the demolition and reconstruction of residential property.

Do I, as the project owner, have to file a declaration if I want to apply the new permanent regime, and if so, which one?

Depending on your situation, you must file the declaration in due time:

Where can I find this declaration?

It is preferable to submit the declaration via MyMinfin (se connecter/log into, choose 'Mes interactions/My interactions' and 'Remplir un formulaire/Fill in a form', identification number 111, choose 111.1 or 111.2). Filing proof of the declaration, including the unique reference number that must be mentioned on invoices and duplicate invoices, will then be available in 'Mes/My documents'. If you are married or legally cohabiting and your spouse also acquires ownership rights relating to the rebuilt residential property, it is enough for one of you to complete and file this declaration.

For all other forms of co-ownership, each project owner must file a separate declaration.

If you do not have access to MyMinfin, you can - exceptionally - request that the relevant office sends you this form by post or e-mail. To do so, call your local office: Office guide > Particuliers/Individuals > Déclaration/Declaration > Construction - déclaration TVA/VAT declaration - Construction > Commune où est situé le bien immobilier/Municipality where the immovable property is located. A form will be provided.

When am I required to file this declaration?

You must file this declaration before VAT becomes payable on the transactions for which you want to benefit from the 6 % VAT rate. Normally, this should be done before demolition and reconstruction activities begin.

The administration accepts that the declaration can be filed after the activities have begun. However, in this case, the reduced VAT rate applies, in principle, only to VAT that is payable as from the date on which the declaration is filed.

VAT cannot be regularised when the declaration is filed and after the VAT has become payable, except in cases of force majeure (e.g. serious illness of the project owner preventing him/her from filing the declaration on time) or material error (e.g. the declaration has been filed but is incomplete or contains incorrect information).

What should I do if a change occurs and involves the conditions no longer being met for the minimum period of 5 years (or 15 years in the case of a long-term rental of residential property within the framework of social policy)?

You must file a declaration to the administration within three months following the date on which the changes take effect (depending on your situation, via a declaration no. 111/1B or no. 111/2B).

Within the same period, (part of) the tax advantage must be refunded.

If you would like a form, please call your local office: Office guide > Particuliers/Individuals > Déclaration/Declaration > Construction - déclaration TVA/VAT declaration - Construction > Commune où est situé le bien immobilier/Municipality where the immovable property is located. A form will be provided.