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Buying your home in Belgium
In a previous article, I discussed the merits of buying your home in Belgium. Here the discussion turns to how to successfully navigate the Belgian property market. Due to the heavy transaction costs involved, your home is immediately worth far less than you paid for it. So it’s not practical to buy and sell as frequently as you might in your home country, and before you commit to a purchase you need to be pretty sure that you have made the right choice, have paid the right price and will be happy living in the property for many years to come.
DO YOUR HOMEWORK
Accept that the process of buying a home in Belgium may take longer than your experience from elsewhere might suggest, and be prepared to rent in the area you want to live in for up to three years. If you’re keen to avoid ‘wasting’ money on rent as soon as possible, this may sound counter-intuitive. In reality, rental payments can be money well spent for many reasons and should be viewed as an insurance policy protecting you from buying the wrong property or paying too much. You can also avoid much of the stress of renovations if you can remain offsite until works have been completed, particularly if you live nearby and can keep an eye on how things are progressing.
The longer you live in an area, the more time you have to get to know the locals, who can be a treasure trove of useful information. You’re more likely to find out the real purchase prices of property in the area from neighbours than from official sources, as so many transactions involve secret payments and private sales. In a country where property transactions are relatively infrequent and opaque and many properties change hands privately, it’s easy to make a mistake on prices. Taxes on mortgage loans, plus 10 percent or more registration taxes – or 21 percent VAT on new homes – combine to suppress property prices in Brussels in comparison with the likes of London, Paris, Amsterdam and Copenhagen.
Are you sensitive to noise? Pubs and night flights can be disruptive to light sleepers. Is security an issue? Is a home prone to burglary? After being robbed four times in less than two years by burglars with different profiles, one Waterloo homeowner concluded that the home they had bought must be on some sort of burglar’s list.
What are the real prices of homes in the area? Whatever you agree to pay, it will probably sound like an awful lot of money and you will have around 15 percent costs to pay on top, in addition to any work that may need doing. The Belgian system involves making an irrevocable commitment to buy within days of agreeing a deal – so you need to be confident that although you’re committing a major sum of money to buying a property, you’re not paying way over the top.
It is often the case that a buyer becomes aware a home is for sale before it is publicly advertised, so if you’ve done your homework and know how much you should be paying, you can benefit from local knowledge and have the confidence to move quickly to secure your dream home.
EVERYTHING COMES TO HE WHO WAITS
If you hold out for what you want, you’re likely to get it. You’re probably going to spend a long time in your new home and you don’t want to be continually reminded that there is something not quite to your liking. Is a south-facing garden important to you? With limited sunshine in Belgium, you may want to ensure that when the sun does come out, you can make the most of it.
Philip Curran is an independent financial advisor based in Brussels