Acquiring private real estate in Belgium: 5 things to keep in mind
Head of Expats at ING
After spending several months in Belgium, perhaps you’ve spotted a nice neighbourhood and decide to settle there with your family. You might therefore be wondering what’s involved with buying real estate in Belgium. And how it might differ from in your home country. What do you need to be aware of? Dave Deruytter, Head of Expats at ING talks about how the process works and offers some useful advice.
Things to bear in mind when buying private real estate in Belgium:
- Be very sure about the property and the price before making an offer, since any offer is binding.
- Have the property appraised before making a formal offer.
- Calculate your borrowing capacity and make sure you state that your offer is “subject to obtaining bank finance”.
- You usually need to be a permanent resident of Belgium and have sufficient regular income in Euros to get a mortgage.
- Typical experts involved: a Belgian notary, real estate agent, bank
1. Prices aren’t as high, but don’t underestimate the taxes
Private real estate prices have typically been less volatile in Belgium than in other countries over the past few decades. They even remained largely untouched by the financial and economic crisis of 2007 - 2008. This is due to several factors.
Essentially the prices of private real estate in Belgium never rose as high as in neighbouring countries. Firstly because local banks do not usually lend money if more than a third of the borrower’s regular monthly income is or will be used to repay debts.
Furthermore, taxes on real estate purchases in Belgium are very high with a headline figure that ranges from 5 to 12.5% on existing properties and 21% for new builds. And that’s not even including notary fees and mortgage registration fees.
Last but not least, rent prices are relatively low in Belgium, because the rental market is small. Most Belgians prefer to own their own home than rent.
2. Choose wisely and get help when drafting an offer
Found your dream home? Make sure the property is really what you want to buy and that the price is really what you’re willing to pay for it. Belgium does not have a system of free offers that can be withdrawn at any time.
Here, an offer (which states the 2 parties, the property and the price) is typically binding once accepted by the seller and signals the start of the formal buying process (“Compromis de vente”). You should therefore take care when drafting an offer to ensure it includes any necessary conditions (subject to obtaining bank finance, for example). Your notary or real estate agent can help you with this.
3. Get a surveyor to check the property in detail
In Belgium, apart from a few exceptions, you typically buy a property “as is”, i.e. in the state it’s in, without any recourse against the previous owner. So, be sure to get a detailed survey and request a valuation before you sign. Those few hundred euros can help you avoid paying too much for a property and alert you to any potential issues down the line. You also need to keep in mind that refurbishing an old house or changing its purpose is subject to strict town planning regulations.
4. Appoint a notary of your own
Property transactions typically involve a real estate agent, property appraiser, bank and notary. The first three are common but only the latter is mandatory.
Even if the seller has his or her own notary, you have the option to appoint a notary of your own at no extra cost to the total notary fees for the transaction. It is therefore recommended that you appoint your own notary.
5. Make sure you have sufficient savings to cover for the extra costs related to the property purchase
Belgian banks are usually quite willing to lend you money for a private real estate purchase in Belgium. You can typically get a loan for up to 90% of the purchase price, provided it will be your sole residential property and that you plan to occupy it yourself. Naturally, subject to a review of your financial situation.
For expats, banks also usually require that you have “permanent” residency status in Belgium and that you receive your regular income in euros.
Make sure you can pay for the fees and taxes on the purchase from your own savings (allow for around 7 to 15% for older properties or up to 25% for a new build). If you are a legal resident in Belgium and the purchase will be your sole residential property, you may be eligible for significant reductions on the property purchase tax, particularly in the Brussels Capital Region.
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