Flanders to Raise Property Tax Back to 3%

The Flemish government is set to raise property registration fees (registratierechten) on home purchases from 2% back to 3% as part of its 2027 budget, a reversal of a tax cut that took effect only in January 2025. According to VRT NWS, the increase would add nearly 4,000 euros to the cost of an average home, and it applies to all primary residences — not only to homes priced above 500,000 euros as initially proposed.

The measure is one of the most contentious elements of a budget deal being finalized by the coalition led by Minister-President Matthias Diependaele (N-VA). The September Declaration, postponed from Monday, is now expected Wednesday afternoon and will be debated in Parliament later this week.

What the tax change means

Registration fees are levied when an official deed of sale is registered. The buyer pays the tax, which the notary collects and passes on to the Flemish government. The 2% rate — and the proposed 3% rate — applies only to a buyer’s sole and primary residence (the enige en eigen woning). Second homes and other real estate are taxed at 12%, while Brussels charges 12.5% and Wallonia charges 3% for a primary home.

According to the Notary Barometer cited by VRT NWS, an average Flemish home costs 392,209 euros. At a 2% rate the registration fee is 7,884.18 euros; at 3% it rises to 11,826.27 euros — an extra cost of nearly 4,000 euros per purchase.

Economists question the approach

Geert Goeyvaerts, a housing taxation researcher at KU Leuven, called the plan “a regrettable intervention,” telling VRT NWS that raising transaction taxes carries a high welfare cost. Because the tax is paid only at the moment of a transaction, it discourages households from moving when their circumstances change — which can in turn affect labor mobility and commuting patterns.

Goeyvaerts also warned of a market distortion. “If such a signal is given, the rush on the housing market can be enormous,” he said, predicting a spike in sales before the measure takes effect, followed by “a serious dip in sales for several quarters.” He added that the increase would likely weigh on house prices.

In 8 years, Flanders went from 10% to 2%, a percentage point per year. I think they somewhat overreached in that regard.

— Geert Goeyvaerts, housing taxation researcher, KU Leuven

Goeyvaerts argued that better alternatives exist, pointing to the annual property tax (onroerende voorheffing), which he said has a weaker negative effect on moving decisions because it is paid yearly rather than at the point of sale. Politically, however, it is far less popular: raising it would affect more than 2.5 million Flemish homeowners, whereas registration fees hit a much smaller group with a much larger increase. The annual property tax also suffers from an outdated cadastral base, he noted.

A promise reversed within two years

The 2024 coalition agreement framed homeownership as “a strong insurance against poverty” and cut registration fees from 3% to 2% effective 1 January 2025, as reported by VRT NWS at the time. Deloitte Belgium confirmed the 3%-to-2% reduction among the key measures of the 2024 accord. The current proposal would undo that cut barely a year after it began applying.

The wider budget package

The registration fee increase is one of several measures intended to close the 2027 budget gap. Per VRT NWS and NNieuws, other on-the-table items include:

The price of service vouchers (dienstencheques) rising from 10 to 12 euros.
The Groeipakket child benefit paid only until age 23 (down from 25) for students living at home.
More than 300 million euros in subsidy cuts, with specifics not yet specified.
A postponed and halved reduction of inheritance tax.
Transport company De Lijn giving up half of its planned expansion and saving a further 25 million euros.

Several earlier proposals were dropped, including transferring the 1,300-euro birth premium into a growth fund, a higher energy premium for businesses, and an increase to water bills.

What to watch

Crucially, the budget has not yet been finalized. All measures described here reflect the government’s latest negotiating position, not enacted law. Diependaele acknowledged the fraught process, saying talks had been in their final stage “on the verge of an agreement” before being paused overnight after Deputy Prime Minister Hilde Crevits (CD&V) and a Vooruit staff member fell unwell.

If the deal holds, the registration fee increase would take effect with the 2027 budget, meaning prospective buyers may face both a rush to close purchases before the deadline and a likely slowdown afterward. Economists will be watching whether Flanders’ reversal signals a broader retreat from transaction-tax reform across Belgium’s regions.