Buying property in Belgium

Belgians are very keen on home ownership. Buying a home is the dream of many Belgians. This involves a major fiscal component: on the one hand, the registration fees, and on the other hand, the tax benefit from a mortgage loan. But you do not have to buy a home with a mortgage loan. You can take an advance from the reserve of a pension savings plan, use your pension savings plan as collateral, or combine a plan of this type with a bullet loan. In this way, you obtain good financing for your property-related project.

Financing

It is essential to build up a supplementary pension. Most people agree with this. A disadvantage is that you must wait until the statutory pension age in order to benefit from your long-term savings effort, unless you use your pension savings plan to buy, build or transform a property. This is possible if you are an employee (group insurance or bonus plan) or a self-employed worker (advance on the reserve or combination with a bullet loan).

YOU ARE AN EMPLOYEE: AN ADVANCE ON A GROUP INSURANCE POLICY OR A BONUS PLAN

As an employee, do you have group insurance through your employer? In this case, you can use it to buy, build or transform a house or a flat. In general, you have three options:

  • You take an advance
  • You use your group insurance as collateral
  • You combine your group insurance with a bullet loan (reconstitution) 

You will find useful information on this subject here.

YOU ARE A SELF-EMPLOYED WORKER: ADVANCE, BULLET LOAN

If you are self-employed, you can also use your pension savings plan for your property-related project.

A few other interesting articles:

TAKING BACK THE CAPITAL ON A MORTGAGE LOAN

Another way to finance the construction, transformation or purchase of property consists in taking back the amortised capital from your mortgage loan. In concrete terms, this means that you will reuse your current housing loan. A major advantage is that you avoid further notary and mortgage fees. You may of course receive a tax benefit thanks to your credit.

Outstanding balance insurance    

If you purchase a home and take out a housing loan, it is important to take out outstanding balance insurance as well. Many lenders offer a more advantageous interest rate if you also take out outstanding balance insurance and/or fire insurance through them.

Outstanding balance insurance protects you and your surviving beneficiaries from the financial consequences of a sudden death. In concrete terms, the insurer is responsible for (part of) the remainder of the loan. The risk that the surviving spouse would not be able to reimburse the rest of the loan is therefore much lower, or even disappears altogether.

Outstanding balance insurance premiums for your sole home are eligible for the housing bonus and may therefore provide you with a tax benefit. However, it is important to calculate beforehand whether you will still have room for the outstanding balance insurance premiums in your tax declaration. Why? Find out why in the following article: Taxes: is outstanding balance insurance tax deductible

WHAT IS THE EXACT AMOUNT OF THE POSSIBLE TAX BENEFIT FROM YOUR OUTSTANDING BALANCE INSURANCE?

In Belgium, it varies according to the Region.

In Flanders: Outstanding balance insurance and tax benefit in the Flemish Region 

In Wallonia and Brussels: Does outstanding balance insurance provide a tax benefit in Wallonia or in Brussels? 

Housing tax in your tax declaration        

Property constitutes a significant part of your tax declaration. For instance, you may receive a significant tax benefit on the loans taken out for your family home, a secondary residence or an investment property. You will find useful information here: Housing tax for the 2018 fiscal year.

Insurance

Fire insurance is also essential if you purchase or build a home. 

Fees

A mortgage loan is accompanied by certain fees: notary and bank fees.

Registration fees according to the Region    

FLANDERS 

Registration fees have recently been modified in Flanders. In concrete terms, the standard rate of 10% has been reduced to 7%  under certain conditions.

WALLOON REGION

Since 1 January 2018, many things have also changed in Wallonia.

BRUSSELS REGION

Registration fees amount to 12.5% in the Brussels-Capital Region. You will find more information here


Combining a bullet loan with your IPA can be a very advantageous type of financing for your property. How do we do that at NN?

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