In a context of land scarcity, a housing crisis, and ambitious climate goals, the Belgian authorities have introduced a new permanent favorable VAT regime starting from July 1, 2025 : the application of a reduced VAT rate of 6% for demolition and reconstruction projects.
A powerful tax lever in a tight market
In concrete terms, this regime allows buyers to benefit from a 6% VAT rate instead of the standard 21% for the purchase of new buildings, provided the project involves demolition followed by reconstruction, and meets the compliance with certain so-called social conditions on the part of the buyer.
The goal is clear: to encourage the redevelopment of old or obsolete buildings, in line with sustainable urban development principles.
What conditions must be met?
To qualify for the reduced rate of VAT, several criteria must be satisfied:
The property must be rebuilt on the same site as the one that was demolished.
It must be a single dwelling of no more than 175 m², intended to:
- Either be occupied as a primary residence for at least 5 years, which is his/her sole and own residence,
- Or be rented out for 15 years to an individual who establishes their main residence there (in the case of a rental investment).
These conditions are designed to target the incentive toward high-quality projects, with a genuine focus on sustainable housing or socially responsible rental investments.
What are the advantages for investors?
For investors-landloord, the benefit is immediate: a 15% VAT saving, which significantly improves the project’s profitability.
💡 For example, on a new apartment valued at €300,000, applying a 6% VAT rate results in a €45,000 saving compared to the standard 21% rate.
If that apartment is rented for €1,200 per month,
the gross yield would increase from 4% (with 21% VAT) to 4.5% (with 6% VAT) – a notable advantage in a market where every percentage point counts.
In a context where construction costs remain high, this measure could allow certain projects to regain financial viability, which might otherwise be difficult to achieve.
The strategic role of BuyerSide
At BuyerSide, we regularly support clients with this type of project.
Our role:
Source and identify eligible opportunities through our professional network,
Analyze yields with and without the reduced VAT,
Negotiate optimal conditions with developers or sellers,
And above all, ensure full compliance with the legal framework (actual demolition, continuity of the project owner, respect of all conditions, etc.).
We also provide a neutral fiscal perspective and a critical assessment of the long-term viability of each investment – beyond the immediate tax incentive.
Conclusion
The 6% VAT regime offers a real and practical opportunity for investors, while making new-build housing more accessible.
That said, it is essential to master the legal and fiscal framework.
Buyerside is here to guide you through the process, helping turn this tax incentive into a genuine driver of performance and wealth security.