Government to inspect Flemings with foreign property who buy home in Flanders

Flemish people who already own property abroad will always have to pay a registration tax of 12 per cent instead of 2 per cent when buying a home in Flanders. This rule already existed but was not checked until now. This will soon change, De Tijd reports.

The new Flemish government is lowering the registration tax for those buying a “only own home” from 3 to 2 per cent from 1 January 2025. The aim is to give prospective buyers - mainly younger people - help to enter the housing market.

To claim that reduced rate, however, the buyer must not own any other property or building land. If they do own other property, they will have to pay 12 per cent. For a home costing 400,000 euros, that means a difference of 40,000 euros.

'Matter of justice'

The Flemish tax administration Vlabel can only check whether the buyer already owns property in Belgium. If a buyer owns property abroad, they can currently take advantage of the favourable rate by concealing the foreign ownership during the purchase process. The chances of getting caught are slim. Those caught have to pay the standard rate of 12 per cent plus a 20 per cent fine.

Flemish Finance minister Ben Weyts now wants to work on controls on foreign real estate. “This is a matter of justice,” he said. “If Flemings lose an advantage because they already have a property in their own country, surely it cannot be that people with property abroad do get that advantage?”

Implementing the inspections

The controls seem easy to implement, as the federal tax authorities can in principle already detect who owns real estate abroad. This must be declared in the annual tax return, something that about 222,000 Belgians currently do. This data is also exchanged automatically with various countries.

However, there are an unknown number of residents who do not declare their property and about whom the tax authorities do not receive information from the country where the property is located. To check whether tenants of social housing do not have foreign ownership, the Flemish government sometimes deploys private detectives in those countries, but there are no plans as yet to do the same for the registration tax.

Weyts' goal is to start the flow of information from the federal tax authorities to Vlabel. Outgoing federal Finance minister Vincent Van Peteghem has already instructed the federal finance department to collaborate on new data exchange projects.

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