Recently we finally finalized our house purchasing in Belgium, after an exciting, long and a bit frustrating process, we finally got there. I am going to share some practical info about the process of buying an apartment or a house in Belgium.
Most people in Belgium prefer to buy a house or an apartment rather than renting. Actually if you have a job, it is quite easy to get a loan so that your monthly mortgage payback is more or less the same amount of the rent, plus you can benefit from the tax refund at the end of each year.
Budget, location, house or apartment
The moment you decide to buy a house or apartment in Belgium, you need to think about the above 3 elements thoroughly. The price of an apartment or house can differ significantly from city to city.
Traffic should also be a big factor in your decision, are you willing to buy a big house with garden and spend 3 hours in the traffic, or buy an apartment near Brussels to have the proximity?
Buying something in Belgium can take up to years, even if you came to agreement with the seller and decide to buy, it can take up to months before you get the keys. If you are going to move to Belgium, best it to rent something first before you buy so that you can get familiar about the neighborhood and the traffic to your work.
All kinds of extra cost
It is indeed more beneficial to have your own property, but be aware, in Belgium, having your own property also results in all sorts of extra cost on top of your monthly mortgage.
1. One time registration fee or VAT
Registration tax (old properties only) – 10 percent (Flanders) or 12.5 percent (elsewhere);
VAT at 21 percent (new properties only) – Value Added Tax is charged on properties less than two years old.
2. One time notary’s fee
It is mandatory to hire a Notary to deal with all the legal papers for buying or selling a property, typically it is 0.2 percent to 4 percent, a fee fixed by law that depends on the purchase value;
3. Yearly Catastral income
4. Yearly fire insurance
5. Yearly/one time life insurance
6. Real estate agent’s fee(if applicable): 0.2–0.6 percent.
If it is the first property in Belgium you are buying, and it is for your own domicile, you can have some tax reduction. Registration fee can be lowered to 5% or 6% if the catastral income for the property is less than 745 euro, more info you can consult here.
Research and Visit
This step is quite easy and interesting, basically you just need to check the properties online(most popular is immoweb) and make appointment with the sellers.
When you visit the property, make sure to check the following things:
1. If there is extra work to be done before you can move in
2. The insulation of the property (typically the EPC value or the monthly payment for gas and electricity is a good indication), whether or not the property is with double window…
3. The neighborhood, try to get to the appointment a bit earlier and walk a bit in the neighborhood. Also check the traffic, school, public transportation, noise…
4. Try to check if the infrastructure in the house is functioning as it should be, if it is summer, don’t forget to check if the heating is working.
5. Most importantly, do you feel “home” when you are inside the house or apartment. Consider you are going to live there for years, you’d better choose carefully.
If you decide to buy the property you visited, you should start with give an offer by phone or by email.
Be Very careful as the Belgians are very serious with the offer, if there is anything about the property that you are not happy, you’d better keep looking.
If you are absolutely sure you’d like to buy it, you should also start the offer with a price that is somewhat lower than the original price, and don’t forget to mention the expiration date of your offer and to protect yourself, you should add “if I cannot get loans from any bank, this offer is automatically obsolete”.
Normally the seller should come back with accept or reject your offer or negotiate the price.
The sale agreement – Compromise
After your offer is accepted, you and the seller should both arrange a date to sign the first legal paper: the compromise. You need to check around and hire a notary already, as the notary from the seller is busy preparing the contract. When the draft is ready, you’d better ask your notary to check if everything is OK before you sign it.
Important! If you have any doubts about the contract, you can ask your notary to negotiate and add extra items in the compromise, remember, notary is very expensive, you might as well make good use of them.
Before signing the compromise, you will be asked to transfer 10% of the house price as a guarantee.
After the signing of the sale agreement, this deal is secured, you will have up to 4 months before the final deeds signature. During these 4 months, you should finalize the application of your loan and the agreement with your current landlord.
If you are not able to proceed further with the final deeds, your guarantee will be lost.
As soon as you have an idea of your house budget, you should start asking different banks for a loan offer. It is very common in Belgium to compare different offers from banks.
Typically, when choosing a bank, you should take the following things into consideration:
1. The loan interest for your capital and defined period
If besides covering the extra cost, you have extra money to cover 20% of your house price, it will be easier to get a loan and the interest will be more attractive.
2. The percentage of the mandate and mortgage for your loan capital
Some banks offers to divide your loan to a certain percentage of mandate and mortgage, this will result to a lower notary cost(only the part of mortgage). But later on your bank identifies you as a bad loan payer, he can decide to transfer your capital to 100% mortgage.
More info here.
3. The administration cost
In Dutch it is called “Dossier kost”, this is the cost for the bank to process your paper in case you get the loan from them, normally it is 300-500 euro one time cost.
4. Compulsory insurance
All the banks in Belgium also sells insurance (fire insurance or life insurance), normally the offer they give also includes a price of one of the insurances.
5. The size and reputation of the bank
I find it very important to count on a bank that is trustworthy, to be honest, we had a very bad initial experience with a conservative local bank, it offered us the loan with a very competitive interest rate and the application went very well. But one week after the application, they came back and say they could not give it to us because my husband and I did not have permanent residences in Belgium. Ironic enough, we both got the permanent residence 2 weeks later.
So that was 2-3 stressful weeks we had during the process, luckily very quickly we got another even better offer from an international bank.
After you sign the loan offering with the bank, your paper will be sent to the notary, they will need some time to process all the paper work and come back with a date for the final deeds.
Your notary will send you the draft contract one week beforehand so you can have a review and come back with questions. Take your time to look at all the items and don’t forget to ask questions to your notary!
On the day of the final deeds, the seller and her/his notary and the buyer and his/her notary will be present at the office of the buyer’s notary. The notary of the buyer will go over each and every item in the contract, meanwhile, all the original paper of the house will be transferred to you.
After the signature, you will receive all the copy of the keys to the house, you can start moving the same day. 🙂