Low registration fees will support family home buyers. The consequences for investors may be limited. Announcing the action will cause buyers to change their timing.
CIB Vlaanderen, representative of the Flemish real estate sector, points out that the Flemish government is keeping its promise. When the housing grant was canceled on January 1, 2020, it was only partially compensated: the 1 percentage point reduction in the enrollment fee rate did not come close to losing the housing bonus. With this new fix, this will now apply. Good news for lowering barriers in our housing market, says company spokesman Christoph Thijs.
Announcing the measure will – as happened with the housing bonus abolition – cause buyers to change their timing, predicts Philip Dewaele, managing director of Dewaele Vastgoed. First-time buyers will either delay signing their contract or compromise – whichever date is important – in order to get a lower price. We’ll see a reverse move for a second home or investment property buyer.
“This measure will reduce duplication in the real estate market,” says Johan van Gompel, economist at KBC. On the other hand, there is a large group that can buy and wants to buy because they have the means to do so. These are the investors or young people who receive support from their parents. They support the real estate market today because of the low interest rates. On the other hand, there is a group in which buying real estate has become almost impossible.
In the long run, it is very good to increase mobility.
According to Dewaele, lower registration fees can keep the market attractive for first-time buyers. “In the long run, it’s very good to increase mobility.” Today, high prices and registration fees are still an obstacle to, say, selling a first apartment and buying a house if children come, for example. “Increased mobility in the housing market also benefits labor market mobility,” Van Gompel adds.
However, there are reservations about modifications to the registration rights. “An increase in registration fees from 10 to 12 percent is not going to be a reason for investors to stop buying,” says Frédéric Vandenhende of Investr, a platform for real estate investors. If investors continue to do their work despite the increase, there will be strong price increases. This measure provides support for young families, but the question is whether this will not be reflected in prices.
The consequences for the new construction market are negligible.
“The consequences for the new construction market are negligible. The registration fee is only paid on the ground, 21 percent VAT on the building,” says Vandenhende. Until today, newly built homes have not received any compensation for the loss of housing premium, and therefore have become more expensive from a tax point of view. The question is whether the federal government will follow suit and also carry out an intervention, CIB Vlaanderen believes.
With the rising registration fees and the possible elimination of the tax advantage for second homes, the investment market is adjusting a lot. The rental market must remain attractive in order to keep rents in check,” says Deweli.
There is certainly a huge shortage of affordable rental housing. How will the Flemish government prevent rental housing investors from giving up? How will you convince them to create affordable rental housing? ‘ asks Christophe Theis.
Announcing the action will cause buyers to change their timing.
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