Renewal will become more expensive after tax reform, but now we have to start renovating en masse

Those who renew later will have to pay a lot for it. At least when Finance Minister Vincent van Petegem’s (CD&V) financial plan makes it. The reduced VAT rate of 6 per cent on renovations of all homes over 10 years old will increase by 3 per cent. Sector associations Bouwunie and Embuild contend that this is bad for the building industry and consumers. Groene, Van Petegem’s coalition partner, asks that this choice be retracted immediately. “In order to encourage people to renew more, the current VAT rate needs to be maintained,” says Jeremy Vanekhout, co-president at Groen.

Excluding electricity, gas and water, the value-added tax rate of 6 percent in Van Petegem’s proposal will be revised. Soon not more than 6 or 12 percent, but only 9 percent. This also has consequences for construction. Thus, the reduced VAT rate for renovating homes older than 10 years will not be 6, but 9 percent and will become more expensive.

The demolition and reconstruction rate will also be lower, at 9 percent. But: This rate usually expires at the end of this year and goes back to 21 percent. Van Peteghem now proposes to permanently fix the lowered rate, which will make it cheaper again from next year.

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But the construction sector is not satisfied with the finance minister’s plan. “This is not a good thing for the consumer and the sector itself. For every 100,000 euros, an additional 3,000 euros is added. For demolition and reconstruction from 300,000 to 400,000 euros, that means an additional 9,000 to 12,000 euros. You can do something already.

The construction is already in the corner where the hits fall. Due to higher housing interest rates, inflation, and much more expensive building materials. Now that renovation is becoming more expensive again, something has been added to that. “I can’t shake the impression that the builder should fund the minister’s financial reform,” Whitness says. According to fellow Embuild member Sven Noten, the action will undoubtedly have consequences. This will cost renovation companies 4.5 percent of the activity. For construction in general, this is a decrease of 1.5 percent. Consumers are now in the process of postponing their projects or Downsizingwhile everyone talks about energy-efficient living and renewal.”

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Word got out. Vigorously renew. The government also wants to encourage everyone as much as possible to achieve as much energy as possible in our homes in the name of the climate. Flanders and Belgium are relatively old houses, so there is still a lot of work to be done. Embild and Bonnie do not understand that the VAT rate for this was not left at 6 per cent. “This way, we will not meet our climate goals by 2050,” says Waeytens.

The appeal has already been heard by the Greens. “This increase in VAT would be an odd choice,” says Jeremy Vanekhout, co-president of Groen. “If Flanders is to meet its climate goals, the pace of renewal must accelerate like a spear. Each year, 95,000 homes will have to be comprehensively renovated. That’s 11 an hour, or three times as much as today. To encourage people to renew more, conservation must be maintained. “The current value-added tax rate of 6 percent. Surely we will not take fiscal measures that could jeopardize the climate transition and the pace of renewal? We assume that Minister Van Petegem will correct this.”

The sector also hopes that the tax plan will be amended. “We will continue to push to keep the rate at 6 percent,” says Sven Notin.