All questions

Real estate ownership

i Planning

Each region has enacted its own town and country planning code. In the Walloon Region, the Walloon Code of planning and zoning, urban development, heritage and energy has recently been replaced by the Walloon Territorial and Development Code. The Walloon Territorial and Development Code entered into force on 1 June 2017. In the Brussels Metropolitan Region, the Brussels Code of planning and zoning applies. A substantial reform of this code has been adopted. Part of the provisions entered into force on 30 April 2018. The most important part of the provisions will enter into force on 20 April 2019. In the Flemish Region, planning and zoning regulations are governed by the Flemish Code of Planning and Zoning and a Flemish Decree on the Unique Surroundings Permit. This decree provides that both the building and environmental aspects are addressed in one single permit that is granted by one single authority. Since 1 August 2018, the socio-economic permit and the environmental permit have been integrated in the 'unique surroundings permit'.

In all three regions, every property falls within a particular zoning area, determined by the applicable zoning plans (regional zoning plans and municipal zoning plans). These plans must be taken into account whenever the competent authorities are dealing with an application for a building permit, but also when issuing any other permit.

Non-compliance with the applicable provisions of the zoning plan or permit requirements can trigger a variety of administrative, civil and criminal sanctions, depending on the date of the execution of the works at hand.

On 1 January 2018, a new Flemish Decree on the Integrated Retail Policy came into force. It allows Flemish municipalities to determine central retail areas with limited retail possibilities.

In the Walloon Region, socio-economic permits are issued by the municipalities or the Region, depending on various criteria, such as retail surface area. The Decree on Retail Premises also introduced an integrated permit that provides that all building, environmental and commercial aspects need to be addressed in this integrated permit.

ii Environment

All three regions have adopted a comprehensive set of rules relating to soil and groundwater contamination. In the Walloon Region, a new set of rules entered into force on 1 January 2019. The following common principles can be mentioned for the three regions:

  1. various events, such as the transfer of land considered as presenting a risk, such as land where activities (included in a list of activities approved by the government) that can potentially cause soil pollution, are or were carried out, accidental pollution or chance discovery of pollution, etc., will trigger the obligation to conduct a preliminary soil survey (except for in the Walloon Region);
  2. the regional public soil agency can request that a descriptive soil survey is filed if there are indications that the soil clean-up thresholds have been exceeded, or that the pollution is a serious threat to the environment and human health. The filing of the descriptive soil survey can give rise to the drafting of a risk management project or a soil clean-up project and, ultimately, to the execution of risk management measures or to the cleaning up of the land. Any soil clean-up project and, except for in Flanders, both the soil surveys will require prior approval by the regional public waste agency; and
  3. in principle, the author of the contamination will be held liable for the pollution. However, the obligation to carry out a soil survey, and, if necessary, to remediate the soil, will rest upon the owner, user or operator of the site, unless they are exempted. If they have not caused the pollution, then they can later recover their costs from the author of the pollution.

Breaches of said regulations can also give rise to criminal sanctions.

iii Tax

The sale of real estate is subject to transfer tax at a rate of 12.5 per cent (if the property is located in the Walloon or Brussels Metropolitan regions) or 10 per cent (if the property is located in the Flemish region). The transfer tax is calculated on the purchase price, which may include the charges imposed on the purchaser. However, if the fair market value is higher than the purchase price, the transfer tax will be calculated on the fair market value. Seller and purchaser are jointly liable to pay the transfer tax.

The sale of a new building may be subject to VAT at a rate of 21 per cent, in which case no transfer tax is due. If the seller is a professional builder, the new building is automatically sold with VAT. Any other seller wishing to sell a new building with VAT must opt to do so; this tax is due on the purchase price of the new building.

Transfer tax exemptions may be available if real estate is transferred within the framework of a transfer of an undertaking or within the framework of a reorganisation.

iv Finance and security

A standard security package required by third-party lenders generally consists of a mortgage or an irrevocable mortgage mandate.

In large transactions, the lender would also take security over other assets, such as a pledge over the receivables (rental income) or a business pledge (similar to a floating charge in the United Kingdom). In this regard, the Law of 11 July 2013 (which entered into force on 1 January 2018) intends to allow pledges over movables without the formal requisite of dispossession, but by means of registration in the pledge register.

A mortgage deed must be signed before a notary public, the cost of which amounts to approximately 1.4 per cent of the mortgage amount. Therefore, borrowers will try to have the mortgage granted for an amount less than the value of the loan, and then grant a proxy to mortgage – by which the debtor irrevocably authorises the lender to establish a mortgage – in addition to the mortgage. Proxies to mortgage minimise costs but increase the risks for the lender.

In addition, certain lenders take in rem security rights over the entire business of the debtors by way of pledges. A business pledge must be registered at the Land Registry, and an amount of 0.5 per cent of the amount for which the inscription is taken is due.