In recent years, purchasing a first property has become increasingly difficult, especially for younger people. Skyrocketing inflation has further put a spanner in the works for many looking to enter the property market, which is why Wallonia is extending a helping hand.
From the large down payments required by banks to take out a loan, rising interest rates, and inflation, it is becoming increasingly difficult for first-time buyers to access the property market. With an increased "housing allowance" the French-speaking region's government is hoping to help these people.
The measure is a discount on the taxable amount of registration duties (which is the regional tax the buyer has to pay on top of the purchase price of a property), or "abatement". A similar change was recently passed in Brussels.
Such an initiative was put in place in 2018 in Wallonia, entitling first-time buyers to an allowance of €20,000 in registration fees, which represents a net gain of €2,500. The measure has already benefited nearly 25,000 households per year.
Doubled allowance
Given the direct impact this has had on people entering the property market, the government has now decided to double the allowance for newly acquired property to €40,000 for properties up to €350,000. This means that, on the first €40,000, the buyer of a property does not have to pay registration fees, the rate of which is fixed at 12.5%.
Once implemented — by the summer of 2023 — this measure is expected to provide a real tax advantage of up to €5,000 for a property subject to the standard registration rate of 12.5%.
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Properties between €350,000 and €500,000 will benefit from an in-between advantage rate, while those exceeding €500,000 will retain the current allowance of €20,000.
As for the allowance on a building plot or a house under construction, the value limits will be halved, with an allowance of €40,000 for acquisitions up to €175,000 and €20,000 for those over €250,000.
"It would not be logical to grant a similar advantage on a plot of land worth €350,000 on which a building is to be erected that would bring the total value of the house well above this €350,000. The provision set up in this way ensures a degree of fairness," a government statement read.
