The logistics of buying a home in Belgium
With taxes unfortunately high in Belgium and red tape notoriously confusing, it stands to reason that when it comes to buying properties here there will be a few things you need to consider.
How long will you stay?
First of all, conventional wisdom in Belgium dictates that buying a property is a long-term investment. This is due to the 12.5% registration tax imposed on property purchases on top of legal fees. A capital gains tax of 16.5% on properties sold within five years is another deterrent to short-term investors.
How much it will cost
The total cost of buying and selling a home in Belgium is estimated to be around 20% of the purchase price. Buying a new-build is more expensive, as VAT is charged on properties less than two years old. On the upside, if you don’t own any other property in Belgium, you are eligible for a rebate.
Do your research
It’s not always easy to get a feel for market values, so start researching prices in the commune where you want to buy. Establishing contact with local estate agencies is useful. While it’s common practice in Belgium for the seller to pay the agency, potential buyers can recruit an agent as a property searcher. Once you’ve found a home, you need to move very quickly, so it helps to have a notary in place.
What happens next
It is typically the seller’s notary who drafts the commitment to buy (offre d’achat/koopintentie. If the buyer backs out there is a small fee, but the seller is able to withdraw without penalty. You can take your own notary on top of the one chosen by the seller. Both parties have the right to choose one, and it won’t cost you more, as they will split the fees.
Upon signing of the sales agreement (compromis de vente/verkoopcompromis), the buyer becomes responsible for the property and must insure it. At this time, a down payment is also required from the buyer (usually about 10% of the total cost). The closing notarial deed (acte notarié/notariële akte) follows within four months, with the remainder of the money changing hands at this point.
Before you sign any agreement, have a surveyor check the property. It’s difficult to put in a claim on the former owner about an undisclosed problem once the sale has been completed. This is particularly important when buying an older property.
Getting a mortgage
Last but not least, get your finances in order and approach a bank for a mortgage. Mortgages can be fixed for the term of the loan, variable annually or reviewed every three or five years, with options on the type of interest payment. The fairly common practice of using a mortgage broker can be helpful. You need to consider the length of a loan (long-term is typical in Belgium) and whether you prefer a fixed or variable interest rate. You can use calculators like these to make a simulation.
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