On 1 January 2002, the power to levy registration duties on conveyances of property for valuable consideration was transferred from the Federal authorities to the Regional authorities.

As announced in a previous PTX headline (nr4, 8 November), the Flemish Region has taken advantage of this to reduce the tax rate on property conveyances from 12.5 to 10%, or from 6 to 5% for small dwellings for properties located in Flanders.

The Flemish Parliament adopted the decree on January 16, 2002 with retroactive effect as from 1 January 2002.

The Flemish Region’s Order in fact sets out two main policy directives: it is not only aimed at reducing the tax rate normally applicable to conveyances but also, under certain conditions, at reducing the fiscal cost of buying a home.

The Decree states the following main measures:

For individuals and legal entities:

• reduce the aforesaid registration duties to 10% (5% for small eligible dwellings for individuals only);

For individuals:

• provide the possibility to claim the reimbursement or the deduction, as the case may be, of registration duties (with a maximum of EUR 12,500) paid on the former residence, provided it is sold within maximum two years after the purchase of the new principal residence and provided they establish their principal residence there, within two years after the acquisition of the property (the so-called “meeneembaarheid”);
• provide the exemption of registration duties on the first bracket of EUR 12,500 for the purchase of the first ever principal residence being the sole property;

Entry into force: January 1, 2002

Reference: Flemish Parliament January 16, 2002