31 July 2018

Reduced rate of 6% registration tax benefit through refund

Since 1 June 2018, the registration tax levied on the purchase of a property has been subject to two reduced rates, namely the 7% rate for the purchase of a 'single, own family home' and the 6% rate for a property that will undergo major energy renovation works within five years of its purchase.

What if you have bought a house in order to establish your main residence there and only decide to carry out an energy renovation after purchasing it? In that case you bought the property at 7% registration tax, although in principle you would be entitled to the reduced rate of 6%.

The Flemish Tax Administration (VLABEL) has confirmed that, in such a situation, you can still claim the reduced rate of 6% by way of restitution.

The taxable person can obtain this refund by submitting a declaration, which proves that you are eligible for the 6% rate.

Please note that this does not mean a rerouting of the time limit within which the taxpayer must establish his main residence in the property. In order to benefit from the reduced rate of 7%, the taxpayer has a period of two years in which to comply with his registration obligation, whereas if the reduced rate of 6% is applied, this period is five years. If the taxpayer loses sight of the two-year period, he runs the risk of increasing the tax, for which restitution as part of the energy renovation will not be able to provide a solution.

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