The advantages of new-build properties

Discover why investing in new-build properties in Belgium offers tax advantages, strong buyer protection and energy-efficient homes with lower costs.

Investing in new-build properties in Belgium offers numerous advantages, including significant tax benefits and solid protection for the buyer. Thanks to the flexible VAT regime, the possibility of tax optimization through the separation of land and construction, and the protection afforded by the Breyne Act, these properties are an attractive choice. In addition, new-build homes meet strict energy performance standards, resulting in lower energy costs for residents. New-build properties not only offer financial advantages, but also provide a worry-free experience thanks to guarantees and reserve funds for future repairs.

Why invest in new-build properties?  

Jonathan Pham, founder of We Invest, has years of experience in the competitive Brussels new-build market. In a short interview, he shares his insights and answers some frequently asked questions about investing in new-build properties. Here are the key points he highlights, including the latest tax regulations and buyer protection measures.

Tax benefits of new-build properties  

Investing in new-build properties offers various tax benefits. In Belgium, the purchase of a new-build property is normally subject to 21% VAT. This may seem high, but recent regulations have made it more financially attractive. Since 2020, for example, a 6% VAT rate has applied to certain new-build projects, provided that the property meets specific conditions such as being occupied for the first time and complying with energy performance requirements.

Another tax benefit concerns the separation between land and construction. The land share is taxed at 12% registration fees, while the construction is subject to VAT. The larger the share of the land, the lower the tax burden. This can reduce the tax burden on the total purchase price, making the investment more attractive. This system can ensure that the total tax burden on the purchase of new-build properties is around 16-17%.

Protection for buyers  

There are several forms of protection for buyers of new-build properties. One important measure is the Breyne Act, which regulates the sale of new-build properties in Belgium.

This act ensures that developers, architects, and construction companies guarantee the completion of the construction project, even if the developer goes bankrupt. In that case, there is a financial mechanism in place to ensure that construction can be continued by other parties, so that the buyer still receives their home.

In addition, new-build homes are strictly monitored for compliance with rules on acoustics, energy performance, and electricity. Independent supervisors inspect the homes on site to check that everything has been carried out in accordance with the standards. This offers the buyer extra assurance that the home meets the highest quality requirements.

Energy performance and low energy costs  

New-build homes in Belgium must comply with the energy performance requirements set out in the EPB (Energy Performance and Indoor Climate) regulations. Since 2015, new-build homes must meet the EPB requirements for energy efficiency, whereby homes must achieve at least energy class A or B. These requirements ensure that homes are better insulated and use energy-efficient technologies, which has a positive impact on the building's energy consumption.

Due to the strict energy performance requirements, new-build homes consume less energy for heating, cooling, and lighting. This results in lower energy costs for residents in the long term. This is an important consideration for both buyers and investors, as low operating costs contribute to the overall profitability and sustainability of the home.

Long-term advantages of new-build properties  

New-build properties also offer advantages in terms of maintenance and warranties. Unlike existing homes, which often require major maintenance work within a few years of purchase, new-build properties typically do not require any major repairs for the first 12-15 years. In addition, from the first year onwards, the property manager sets up a reserve fund, as required by the law on co-ownership. This fund provides a safety buffer for future major repairs and offers buyers extra security. Another important advantage is the insurance against hidden defects that protects the buyer for the first year after purchase. This is a protection that does not exist when purchasing an existing home. In addition, the 10-year warranty for new-build properties ensures that the developer, architect, and construction company are obliged to intervene free of charge in the event of problems with the stability or waterproofing of the building.

Conclusion  

Investing in new-build properties offers numerous advantages, both fiscally and operationally. Recent tax measures, such as the reduced 6% VAT rate and the possibility of optimizing the tax burden by separating land and construction, make new-build properties more financially attractive to investors. In addition, the Breyne Act provides solid protection for buyers, while energy performance requirements ensure lower energy costs.

Thanks to the 10-year warranty and reserve funds, buyers are also assured of a worry-free experience in the first few years after purchase. New-build properties therefore remain a smart choice for those who want to invest in a future-proof and financially advantageous home.

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