Permanent VAT rate of 6% approved!

News.

The federal government has decided to apply the reduced VAT rate of 6% for demolition and reconstruction projects permanently to sales projects as well. An important step forward for the construction industry and for affordable housing.

Until now, the standard VAT rate of 21% applied to the demolition and reconstruction of a property, unless specific conditions were met to qualify for the favourable rate of 6%. Since 2007, this scheme has been amended repeatedly, each time with varying conditions and restrictions.

Last year, the reduced rate of 6% was finally introduced for individuals who have a house rebuilt for their own occupation or to let. Until now, sales projects were subject to a temporary arrangement, expiring on 30 June 2025.

Permanent VAT rate of 6% approved!

The federal government has decided to apply the reduced VAT rate of 6% for demolition and reconstruction projects permanently to sales projects as well. An important step forward for the construction industry and for affordable housing.

The new decision changes that. From 1 July 2025, the 6% rate will also apply permanently to sales of reconstructed houses, provided that:

  • it concerns the buyer's sole and own home,
  • the living area does not exceed 175 m².

This measure is crucial in light of the housing shortage. An estimated 375,000 additional housing units need to be built by 2030 to meet growing demand. Without sufficient supply, housing prices risk rising further, making housing unaffordable for many.

Large-scale demolition and reconstruction projects are an efficient way to create more housing quickly and sustainably. The reduced VAT rate is therefore an important incentive for such projects. For investors too

Investors too can now enjoy the reduced rate, subject to certain conditions:

  • At least 15 years of residential letting
  • Or letting to a social housing company

*This approval appeared in the Belgian Official Gazette on 29 July 2025.

Personalised advice:

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