For your information, please find below a (non-exhaustive) overview of some of the relevant changes in the past year 2017 that might not require “immediate action” from your part but could yet be relevant to your real estate practice in Belgium.
Case law of the court of appeal of Antwerp
A few court decisions issued in the course of 2017 regarding real transaction deals reached national news for weeks, although the court of appeal has in fact taken similar decisions since 2013 on a regular basis. In short: the court of appeal of Antwerp strongly believes that a real estate transaction (such as the purchase of a building) cannot be validly concluded without a material document signed by hand in original copies by all parties. This case law received a lot of negative critic from the doctrine. However, the court maintains her case law, which means that the closing of a deal through e-mails, for instance, is not considered valid in the territory on which the jurisdiction of the court of appeal of Antwerp applies…
To my opinion, a real estate transaction can be validly concluded verbally, according to the Civil code, and e-mails or other written documents can be served as proof of this verbal transaction. The court of appeal of Antwerp does not share this opinion: caveat.
Change of opinion of the social obligations administration (ONSS) regarding the declaration of the construction site
As you know, the construction site must be declared in Belgium to the administration. It was generally admitted that this obligation was only incumbent upon the building contractor.
The administration, in an e-mail of May 8, 2017, modified her interpretation and considered that the building contractor, in the sense of article 30bis 5° §7, also includes real estate developers.
The absence of or incomplete declaration in due time of the construction site entails important fines.
Law of May 31, 2017 regarding compelling insurance covering the liability for stability defects.
Before this new law, only architects were submitted to the obligation to provide insurance coverage for their liability for stability defects (during ten years). This obligation now extends to building contractors (entrepreneurs) and engineers (bureau d’étude) but not to the real estate developer (promoteur)…
This law only concerns the building of residential real estate (which does not include, for the scope of application of this law, hospitals and student rooms).
New Belgian real estate investment company structure (FIIS / GVBF) – Law of April 19, 2014, more recently implemented by Royal Decree of November 9, 2016
By creating the FIIS/GVBF, the Belgian legislature intends to address the needs of institutional and professional investors to have their real estate investments and related risk and return profiles customized and controlled. In this way, for the first time, institutional and/or professional investors will be able to take a controlling interest in a (dedicated and beneficially-taxed) real estate investment vehicle.
The FIIS enjoys an advantageous tax regime. For instance, the FIIS/GVBF will be subject to corporate income tax, but its taxable basis will be limited to disallowed expenses and abnormal or gratuitous advantages received. Rental income, capital gains on real estate assets, and dividend and interest income will remain untaxed as a matter of principle.
It must be noted that the added value realized through the investment in the FIIS is subject to an exit tax of 17% computed on the sum of all latent capital gains and tax-free reserves.
In a nutshell, investing in a FIIS is interesting when (i) the asset is not held by a special purpose vehicle and (ii) the asset is entirely or nearly entirely written off.
If you need more information about this new interesting way of investing in Belgian real estate, please inform me and I will provide you with a complete explanation on the regulatory, economic and tax aspects of the structure.
On November 30, 2016, the Flemish government concluded an agreement on the limitation of real estate expansion as from 2025 and a complete stop as from 2040. This decision only applies to the Flemish territory.
These are general principles at the moment and we are waiting for a decree to be promulgated.
It is unclear yet how this is going to influence the market but I think it is a fact that your business analysts shall definitely take into account when defining the business plan on the middle and long term.
Draft Decree of the Walloon Region regarding soil pollution
Until now, the Decree of December 5, 2008 regarding soil pollution has remained mostly theoretical because of the non-implementation of its article 21. In short: there is no database of polluted soils so that the obligation to clean up the soil when its property is transferred cannot be enforced upon the parties. This might change soon, as a draft decree has been issued this year. For the moment, it is being examined by several advising institutions. When it will be promulgated, there might be an effective obligation to depollute soils when transferring property (or long lease, or building rights …) in the Walloon Region, just like it is already the case in Brussels and in the Flemish Region.
A new territory management Code applies to the Walloon as from June 1, 2017
Demands of authorizations filed with the town planning administration before May 31, 2017 will be managed in accordance to the former legislation (CWATUPE). But permits obtained under the former legislation which have not expire yet will expire in accordance to the new legislation (which is more advantageous).
A new legislation regarding public tenders
The Real Estate & Construction department remains at your entire disposal for any further information.
Judit Karlsson, lawyer