Relaxed renovation requirements and lower sales taxes: What do the new rules mean for your dream home?

Housing in Flanders is changing. The Flemish government has announced new measures in the Flemish coalition agreement aimed at making living, buying, renovating, and even renting more affordable and sustainable. But what does this really mean for you? Whether you’re looking for a home, considering a renovation, or renting, these changes could have a major impact on your housing goals. Time to get everything straight!

Buying: Paying less in sales tax—is that really good news?

Buying a home is one of the biggest financial decisions you’ll ever make. That’s why the Flemish government wants to make homebuying more attractive by reducing the transfer tax ( formerly known as registration tax, the tax you pay when registering a deed, such as when purchasing a home) from 3% to 2% starting January 1, 2025. That sounds like a win, doesn’t it?

But let’s think twice. This lower rate applies only to your first home, and you must live there yourself. Do you already own one or more homes? In that case, you cannot take advantage of the lower rate, and the 12 percent rate will apply. Professional sellers, on the other hand, will face an increase from 4 to 6 percent. On paper, that represents a significant savings. Take, for example, a home priced at 328,800 euros; with the new rate, you’ll save nearly 3,300 euros!

However, there is one caveat: previous reductions in sales taxes have led to an increase in home prices. Will that be the case this time as well? Only time will tell. Perhaps that dream home will end up being just a little more expensive than hoped.

Renovation: Mandatory Renovation with More Flexibility

Are you planning to renovate? If so, there’s good news. The strict renovation requirement for energy-inefficient homes is being relaxed. Instead of having to renovate to energy label D within 5 years, you now have 6 years to do so. And that’s not all: plans for further tightening of the rules have been scrapped entirely. The requirement to bring every home up to energy label A by 2045 has been dropped.

Does this mean we can all just sit back and relax? Not really. The government continues to encourage sustainable renovations through grants and low-interest loans, such as the My Renovation Grant and My Renovation Loan. So, are you planning to make your home more sustainable? That’s certainly encouraged, but it’s no longer a requirement. Time to think about that heat pump?

Renting: More Rules, More Opportunities

Are you a renter in Flanders? You’re not alone! About 1 in 4 people in Flanders rent a home. The government is committed to providing affordable, high-quality rental housing, though for now it remains a bit unclear exactly how they plan to do that.

There is, however, good news for low-income tenants. The budget rent system is being expanded so that they, too, can live in housing below market rent. And if you’re having trouble paying the security deposit? You’ll be given more time:the repayment period for the security deposit loan is being extended from 24 to 36 months.

One thing is certain: starting in 2028, landlords will no longer be allowed to adjust rent upward if their property does not meet certain EPC requirements. This means that rent cannot simply be raised unless the property meets the energy standards.

Affordable housing: more funding, but also more requirements

Waiting for public housing? That remains a challenge. The Flemish government is allocating 6 billion euros for the construction of new social housing, but whether that will shorten the waiting time remains to be seen. What is changing, however, is that tenants must meet stricter requirements: a higher level of Dutch language proficiency, a willingness-to-work assessment, and priority for working people. This may be a stumbling block for many, but for others, it might actually be an opportunity.

The measures have yet to be finalized, but the Flemish government is clearly taking steps to make housing, home purchases, and construction and renovation more affordable and sustainable. It remains to be seen what impact this will have on the housing market. Are you looking to buy your first home? The reduction in registration fees might just be the push you need. Are you planning to renovate? The extra time granted for the renovation requirement gives you a little more breathing room. And tenants? Hopefully, they can count on more affordable options, especially as energy efficiency becomes a factor.

Sources: 

- Flemish Coalition Agreement 2024–2029. Working Together for a Warm and Prosperous Flanders. (September 30, 2024). Flanders. 

- Relaxation of renovation requirements and lower registration fees: here’s what changes if you want to buy, renovate, or rent a home. (September 30, 2024). VRT. 

- What does the reduction in registration tax mean for you? (September 24, 2024). De Tijd.