The new Belgian federal government “Arizona” agreement, which has been in place since January 2025, is led by Prime Minister Bart De Wever. This agreement brings several changes to the real estate sector in Belgium this year.
Here are some important points:
- Elimination of interest deduction for multiple property owners. This could make rental investments less profitable.
- The government has also planned measures to encourage energy renovations. For example, there is now a reduced VAT on certain works. This aims to promote more sustainable buildings.
These reforms seek to balance taxation while addressing environmental issues. However, they also raise questions about access to housing for low-income households.
Currently, real estate prices continue to rise. There is talk of a rate increase with an average rise of 12% over the last two years. This makes homeownership increasingly difficult for a large number of households.
Finally, for those wishing to finance their property purchase, it is important to inquire about real estate loans and mortgage credit. The construction sector must also adapt to this new housing policy.
What is the Impact of the Arizona Government on Real Estate?
The coalition agreement of the “Arizona” government has a significant impact on the real estate sector in Belgium. They have decided to end the interest deduction for multiple property owners. The idea is to make taxation fairer. However, this could also make rental investments less profitable.
Here are the possible consequences:
- The demand for rental housing continues to increase. Fewer tax incentives could curb the purchase of rental properties.
- This could also drive up rental prices. Access to housing is already difficult for many people.
On the one hand, some experts believe this initiative is good. It could protect vulnerable tenants against sudden rent increases. In fact, a recent study showed that 40% of tenants saw their rent increase by more than 8% last year. On the other hand, real estate investors are concerned. They fear for the profitability of their properties. This could hinder them in their purchase and construction projects.
Furthermore, financing conditions are complicated. With the rise in interest rates, it is even more difficult for potential buyers.
All of this could exclude a large number of low-income households from the real estate market. This exacerbates social inequalities. The government wants to implement measures to help vulnerable households, but it is not yet known if this will truly work.
Impact on Multiple Property Owners
Multiple property owners are particularly affected by the new rules of the federal government. The end of interest deduction on real estate loans means they will have to pay more for their borrowings. This risks reducing their profitability.
Here is what this could entail:
- Some might sell their properties.
- Others might invest in housing with better energy performance, as required by the PEB certificate rules.
There is still some good news: the simplification of administrative procedures. For example, the abolition of Annex 270 MLH for professional rents. However, this is not enough to offset the losses related to the end of interest deduction.
Ultimately, multiple property owners will have to adapt to a more complicated environment. Their operating costs could increase, but their rental income will not necessarily follow suit.
What are the Implications for Investors?
For investors, the Arizona agreement brings challenges, but also opportunities. On the one hand, the abolition of tax deduction on mortgage interest makes rental investments less attractive. This could lead some to review their strategies. On the other hand, the federal government has launched measures to encourage energy renovations. Energy is now at the heart of these new rules.
Here are some examples:
- A VAT at the reduced rate (from 21% to 6%) for heat pumps, valid for five years.
- More flexible conditions for accessing green loans.
These initiatives could interest investors who want to turn towards more sustainable properties. This can also increase their value on the real estate market.
What this Means for Investors
Investors will have to adapt. Today, the energy performance of a building becomes a very important criterion.
- Funding for energy renovations is more accessible. This could encourage investors to modernize their properties.
- Banks now facilitate access to PEB certificates (building energy performance). This can help obtain a real estate loan for properties with good energy status.
These changes show that housing policy is evolving towards greater sustainability. Stakeholders in the real estate sector and the construction sector will have to follow this trend.
Housing Support Policy
The new federal government, through the Arizona agreement, aims to change many things in the real estate sector. Since January 2025, several measures have been implemented to improve access to housing and encourage more sustainable projects.
Provisions for Buyers
A suspensive clause is now added to all sales contracts. This means that if your mortgage loan is refused, the sale is canceled without penalty. This measure protects buyers and reduces financial risks. It is a real boost in a real estate market where transactions often happen very quickly.
Promoting Sustainable Renovations
The government also wants to encourage eco-responsible renovations. Here are some initiatives:
- Facilities for obtaining green loans, to finance energy renovations.
- Simplified access to PEB certificates (building energy performance) to facilitate financing.
These changes should help investors modernize their buildings and increase their value. This also stimulates the construction sector, while addressing environmental issues.
A Challenging Context
Despite everything, the situation remains complicated for many people. The rise in interest rates makes real estate projects more expensive. The abolition of tax deductions on mortgage interest also complicates matters for multiple property owners, who could see their income decrease.
Tax Reforms and Impact on Purchasing Power
The federal government, with the federal coalition agreement also called the Arizona government, has launched new tax reforms. These changes will have a significant impact on citizens’ purchasing power and the real estate sector.
Increased Costs for Households
The abolition of certain tax deductions, such as those on mortgage loans, will make real estate loans more expensive. Interest rates are rising, and with the rate increase, this puts additional pressure on households. Low-income families might find it harder to obtain a real estate loan. Banks risk tightening their criteria: they might request higher down payments or stricter financial guarantees. This complicates access to homeownership, especially for young families.
Fewer Choices in the Real Estate Sector
With these new conditions, it will be more difficult for some households to invest in properties. Affordable options will decrease, potentially leading to a price increase in the real estate market. This could reserve access to homeownership for wealthier households. To avoid financial problems, families will need to plan their budget carefully. Financial advice or the help of our real estate agent could be useful to navigate this context.
Support for First-Time Buyers
The new government plans subsidies to help first-time buyers purchase their first property. These financial aids can encourage young households to take the plunge. However, beware: if the real estate supply does not keep up, this could lead to a price surge. This imbalance could negate the benefits for first-time buyers.
Promoting Sustainable Housing
To limit negative effects, initiatives have been launched:
- Aid for energy renovations, such as insulation or the installation of solar panels.
- Programs to support solidarity rentals.
These measures aim to protect the most vulnerable households while stimulating the construction sector.
Promotion of Energy Transition
The federal government, within the framework of the federal coalition agreement, wants to encourage the transition towards more ecological housing. Several measures have been put in place to achieve this. These initiatives affect a large part of the real estate sector and the construction sector.
Aid for Modernizing Buildings
The VAT at the reduced rate (6%) is extended for demolition-reconstruction projects. This allows buildings to be modernized to meet energy standards. This measure also facilitates renovations, especially in co-ownerships, by lowering the agreement conditions for initiating works. The plan includes an energy renovation premium, adjusted according to household income. The most modest households can receive up to 25,000 euros for their projects. In addition, free audits are planned to guide owners towards the most effective works.
PEB Certificates at the Heart of Mortgage Loans
The PEB certificate (building energy performance) becomes central. Banks will have direct access to the databases of these certificates. This simplifies the granting of mortgage loans, especially for properties with good energy performance. This measure could encourage buyers to prioritize more ecological homes, which helps the sustainability of the real estate sector.
In Summary
The Arizona government, through its coalition agreement, aims to make housing more ecological and help households adapt. Whether through aid, premiums, or lower rates for sustainable properties, these measures affect a large part of families and investors.
Conclusion
The new government, with its Arizona agreement and its reforms, is transforming the landscape of the real estate sector and the construction sector. Measures such as the VAT at the reduced rate, aid for energy renovation, and facilities for mortgage loans show a desire to make the real estate market more sustainable and accessible.
However, these changes can also lead to a rate increase and a price increase, which would put additional pressure on households’ purchasing power. Particular attention will need to be paid to ensure a balance between access to housing and market stabilization. Ultimately, these reforms aim to improve housing policy as a whole, but they will have an impact on a large part of citizens, investors, and stakeholders such as real estate agents.
If you need support to navigate these new regulations and realize your real estate project, our professional agents are here to help you! Do not hesitate to follow our online news closely to access the latest practical information and advice on how to finance your property purchase in this evolving context.
