After more than seven months of intense negotiations, a federal government (baptised the “Arizona coalition”) has been formed, resulting in a 200-page long – sometimes very detailed – coalition agreement for the period 2025-2029 (the “Federal Coalition Agreement”). Some of the measures set out in the new Federal Coalition Agreement will have an impact on (parts of) the real estate sector.
Please note that the Federal Coalition Agreement has yet to be enacted into law or royal decrees and thus so far only reflects the new coalition’s intentions. During the first week of February 2025, it was clear that the proposed measures still needed to be further (re-)negotiated, clarified, adapted and transformed into formal legal texts in the coming months or years. The trade unions organised a first general strike on 13 February 2025 and further (partial) strikes have been announced from February to June 2025…so there’s pressure on the federal government from the start.
In this blog article we will highlight the most important points for the real estate sector. (You can also read the blog articles by my employment law colleagues about significant potential changes in employment and social security law that triggered the trade unions to start protesting immediately.)
Real Estate Companies : Share deals – Capital gains tax
Given that the real estate transfer tax in the three Belgian regions is at a high level (up to 12.5%), the vast majority of professional real estate is transferred via share deals. The Federal Coalition Agreement contains in its chapter on Fraud Prevention the vague commitment that “the federal government will help the regions, if they wish, to fight against so-called share deals involving real estate companies”. It is unclear yet how this will be transformed into precise measures, as the real estate transfer tax falls under the competency of the three regions. In the past, some unsuccessful attempts were started in certain regions to introduce making the real estate transfer tax also become due on the transfer of a real estate company’s shares. The Federal Coalition Agreement also contains a general undertaking to evaluate the New Companies Code, which could also impact real estate companies and could also be used to define further when the transfer of shares would trigger the real estate transfer tax (or a similar tax).
The Federal Coalition Agreement also contains a new general capital gains tax on shares and other financial assets, baptized as a “solidarity contribution”. Until now the capital gains have in most cases been exempt. The Federal Coalition Agreement proposes a tax of 10% on the capital gains realised as from this measure’s introduction. Thus, capital gains from the past will remain exempt. Deductibility of capital losses (from this income category) within the year will be allowed; however, the delta of losses will not be transferable.
A base exemption of EUR 10,000 (to be indexed annually) will apply, so as not to attack small household investors. If the seller holds an interest of at least 20% in the sold company, then EUR 1 million will always be exempt (a capital gain as from EUR 1 million up to EUR 2.5 million will be taxed at 1.25%; as from 2.5 to 5 million EUR at 2.25%; as from 5 up to 10 million EUR at 5%; and a capital gain of more than 10 million EUR will be taxed at 10%). It has not yet been determined how the valuation for unlisted companies will take place via a clear and an efficient method, so this will need to be further clarified. Existing taxes on capital gains (miscellaneous income at 33%, the sale of substantial shareholdings outside the EU at 16.5%) have not been addressed in the Federal Coalition Agreement and thus are to remain unchanged.
This particular proposal has already given rise to heated discussions between the five coalition partners and it is clear that more discussions will follow as not everyone is ‘on the same page’.
Another general measure in the Federal Coalition Agreement is the introduction of an exit tax upon the cross-border transfer of a Belgian company that tax-wise would be considered as a fictious liquidation. The implementation will of course need to take into account EU legislation and the existing tax treaties. As there is no exception, this would also apply to real estate companies.
Construction sector climate-neutral approach
The federal government also wants to maintain the objectives of the ‘European Green Deal’ by investing further in encouraging renovation via tax incentives and financial support. To meet the set climate and energy targets, measures will be taken to make buildings more sustainable and climate-neutral, of which the following are the most important:
Generalisation of the reduced VAT rate for demolition and reconstruction as well as heat pumps
The Federal Coalition Agreement wishes to generalise the reduced VAT rate for demolition and reconstruction sites by putting an end to the currently existing transitional arrangements, which are in force until 30 June 2025, by establishing a uniform reduced rate of 6% VAT for the demolition and reconstruction of real estate, with no exceptions regarding location or the party concerned. This will also apply to the deliveries or supplies, and maintaining current “social conditions”, but will tighten the surface area requirement from 200m² to 175m².
The Federal Coalition Agreement also stipulates the commitment to provide for clear definitions of “demolition” and “reconstruction”, to avoid the sometimes tedious discussions with the tax administrations in this respect.
The Federal Coalition Agreement also provides for the reduced rate of 6% VAT for the delivery and installment of heat pumps and, on the contrary, a 21% VAT rate for installations using fossil energy sources and also for coal.
Stability for the real estate market: a mandatory condition precedent in purchase agreements of residential real estate on financing – Financing of EPC-friendly investments
A legal obligation will be imposed to automatically include a condition precedent in every sale-and-purchase agreement for a private residence regarding the purchaser obtaining the necessary financing. Without such a condition precedent, the sale-and-purchase agreement of residential real estate will be null and void. The idea behind this proposal is to ensure the financial security/certainty of the private individual purchasing and thus improving confidence in the real estate market.
Especially for the EPC, the federal government also wants to provide another financial incentive by giving lenders access to an EPC database. In consultation with the National Bank of Belgium and the three regions, the federal government will examine potential measures to ease the conditions of mortgage loans for the purchase of real estate with a good energy performance. This is to support the integration of energy efficiency into banks’ risk management and risk analyses.
Rewards for climate efforts : (green) investment deductions
Investment in green energy, technology and climate-friendly innovations is considered imperative. The federal government will strongly support companies in their climate efforts. The investment deduction will be transferable indefinitely. In addition, the green investment deduction will be simplified and made more accessible, especially for investments in the energy transition. The rates for the increased investment deduction for the energy, mobility and environmental lists will be harmonised to 40%.
Modernisation of the construction sector
ThThe Federal Coalition Agreement reflects the intention to make the construction sector more consumer-friendly, i.e. with increased protection for consumers from unfair commercial practices in the construction sector, and modernisation, by:
- following consultations with the sector and consumer organisations, the adaptation of the Belgian Housing Act of 1971, known as the Breyne Act;
- the introduction of a fully-fledged ombudsman service for the construction sector and giving more visibility for other support systems,
- the introduction of a legal protection scheme for consumers wishing to convert or renovate regarding casco schemes and large renovation projects, but it is unclear what this will entail.
Regarding the Belgian Housing Act of 1971, there is the intention to eliminate the existing loopholes in the current Act, to strengthen enforcement by inspections and to optimise and to expand the “professional ban” sanction for wrongdoers.
Circular economy
The circular economy is important to this government in a world where demand for raw materials is growing. In collaboration with the three regions and all involved stakeholders, the federal government wants to continue its efforts and be a leader in the circular economy and recycling. Several ideas have been proposed, including developing product standards flexible enough so that recycled raw materials can be reused as much as possible, taking into account the end-product’s final quality. The principle is to set the bar equally high for non-European products.
Soil – PFAS
The federal government is dedicated to phasing out PFAS at the European level and establishing a common standards framework as well as an action plan. The regional efforts to remediate historically contaminated sites will be supported. A sector-funded PFAS-fund will be made operational to compensate all PFAS damages and all victims of PFAS pollution.
Working on construction sites : stricter monitoring
To increase the battle against rogue subcontractors, chains of subcontracting in the wider construction sector will be reviewed. At the same time, there will be an obligation to register leaving construction sites to battle social dumping and to increase safety on construction sites, as has already happened for the cleaning and moving sectors.
This will complement the ban on so-called ‘financial subcontracting’ in construction, which has been in force since 1 January 2025, in which a subcontractor already now must comply with two prohibitions:
- the prohibition on sub-contracting in full the works entrusted to him/her;
- the prohibition on subcontracting the works entrusted to him/her to several sub-subcontractors, as a result of which the subcontractor only carries out coordination work.
Regarding this ban on financial subcontracting, the following blog article is already available: Contractor chains in the construction sector: significant limitations for subcontractors from 1 January 2025
Lease Agreements : hospitality and slums (“huisjesmelkerij/marchand de sommeil”)
The federal government recognises the need to address the imbalance in off-take contracts between professionals, particularly in the hospitality sector. The lists of prohibited unfair terms between professionals, as provided in the Economic Code, will be supplemented to eliminate “strangulation” clauses. The intention is to provide at least for a legal prohibition on terminating a lease agreement as a sanction for failing to fulfil an obligation by the lessee, not affecting the lease obligations in themselves, such as an exclusive and/or minimum purchase obligation. This will imply the review of many lease and franchise agreements for bars, restaurants and hotels.
The Federal Coalition Agreement recognises that some central cities and their suburbs suffer from large-scale problem neighbourhoods that are highly impacted by undermining and other serious problems. To make these neighbourhoods structurally more liveable, there is a need for a coordinated whole-of-government approach and case consultation via an area-based operation. To enable making this area-based approach possible, and in consultation with the regions and with the deployment of the police, inspection services, city and emergency services, there is also a targeted strengthening of the public prosecutor’s office and the labour auditorate needed, in order to increase the focus on combatting, among other things, the renting out of slums/hovels.
Leading role for Regie der Gebouwen / Régie des bâtiments
In the context of modernisation and simplification, the federal government is proposing specifically for the Regie der Gebouwen/Régie des Bâtiments the making of an accessible inventory of all real estate -excluding strategic and sensitive sites – concerning ownership, possession, management and/or use. The Regie der Gebouwen/Régie des Bâtiments is the “property manager” for the real estate needs of all federal services. Such an inventory should allow optimal use of the available real estate and a quick(er) reallocation, sale or transfer of unused real estate. The aim is to make property information easily accessible, which is in line with other recent already introduced initiatives (such as the housing and buildings pass).
The Regie der Gebouwen/Régie des Bâtiments is also to be a leading example in the pursuit of more energy-neutral buildings. The final goal is to make the federal government’s entire property portfolio climate-neutral by 2050, in line with European targets. Energy audits will continue to achieve this objective. The Regie der Gebouwen/Régie des Bâtiments collaborates with the private sector through DBFM projects or similar alternatives, provided that cost-benefit analyses, which include non-financial factors, show that this is the most beneficial approach.
The aim is also to rationalise the portfolio of buildings that are “not owned “by the federal government by introducing a phased reduction during this government period until 2029 of leased surfaces by 15%. Currently, there is said to be an oversupply of office space for federal government departments due to changed working conditions such as teleworking. Only in the case of operational emergencies and, to the extent they can be justified, new leases may be entered into.
Making it easier for co-ownerships to decide on energy friendly investments
The Federal Coalition Agreement includes the intention to modify the decision-making process for property under co-ownership, i.e. mainly apartment buildings/projects. A simple majority (instead of 2/3rd) would be sufficient to carry out “energetic interventions”. The aim is to remove barriers to energy renovation and the installation of renewable energy installations such as solar panels and the installation of charging stations.
In addition, the federal government wants to support sustainable investments by co-owners’ associations through the commitment to encourage such co-owners’ associations to prepare a multi-year investment plan. This plan should include an approach to elaborate climate-related investments. This is to provide more transparency to individual co-owners and allow the latter to identify the costs of sustainable investments. It has not yet been determined how this will be done.
To support co-owners‘ associations in such energy-friendly renovations, the federal government will examine possibilities in which co-owners’ associations can be granted loans from financial institutions more easily and under more advantageous conditions.
Conclusion
Some of these planned measures can be implemented swiftly (such as the 6% or 21% VAT changes), but others will take more time and further discussions on the implementation details…and some will not make it into new legislation. We will closely monitor these discussions to anticipate the consequences for the real estate sector. If you have any questions or comments, then please do not hesitate to reach out to me.
