The platform for Belgium's international community

Search form

menu menu

Selling a flat in Brussels

Question

Hi,
I own a flat in 1000 Brussels which I'm thinking of selling.
I lived there for many years (2005-2012) before moving on; I've been resident back in the UK since 2015 (I'm a British citizen; never got around to applying for Belgian citizenship). I bought it for 100K back in 2005; I should get around 250K for it now. There are just under 5 years left on the mortgage; an outstanding balance of just over 30K.
I know nothing about selling. What sort of legal fees are involved? Is capital gains tax payable in Belgium or the UK or both?
I'm just wondering what kind of amount I might end up with to put towards buying a place in the UK. Any thoughts or advice appreciated!
Cheers.

R

Few points:
- You owned your property for over 5 year, no capital gain tax, all the 150% profit you estimate to make it will be yours
- It’s a seller market despite the Covid crisis, good apartments in good locations go very fast sometimes on the first week of advertising. If you think it’s worth 250K market it at 265K and wait for the best offer. You can always lower it down if you see it doesn’t sell or there is no interest but Brussels 1000 is in high demand.
- I wouldn’t really bother with agencies (and lose a 3% approx. 7.5K in my profits). If you have the availability to sell it yourself just clean it up, declutter, make it presentable, take some good pictures, rent an ads in Immoweb for few weeks, or Immovlan which is free, and a sign on the entrance door. Remember you sell your apartment in the first ten seconds of visit. So those first ten seconds are important. In Immoweb you have plenty of examples how NOT to sell an apartment!
- Have your Notaire ready and an offer letter ready to be signed by a potential buyer. You can easily find them online or ask the Notaire for a soundproof one. He/She will also deal with preparing the other documents (Compromis de Vente and Act d’Achat).
- You would also need an Energy Certificate PEB, an Electricity Certificate and at least two years of reports from the Building syndic so the buyer could estimate running costs.
- Your Notaire will also handle the remaining capital that needs to be repaid to the bank where you contracted the mortage, the “hypoteque” a fee on the original value of the apartment will also be deducted, also a portion of the property tax until you’ll be owner of your place. His/her fees will also be deducted from the amount you receive, these are set by the state so not very high. You’ll be paid with the remaining difference in your account.
- Once sold provide your forward address to the Syndic as you might still be liable to some costs for 2021 (possibly available only on 2022, yes).

Best of luck, is not a difficult process at all if you organize yourself well.

Jan 1, 2021 13:36
anon

Hate to disagree with "R" above, but as a UK tax resident, you will be liable for UK capital gains taxes on the sale of the property.

Unfortunately, you did not sell the property before you left Belgium, as residential property is free of capital gains taxes in Belgium.

Now that you are tax resident in the U.K. you will be liable for capital gains taxes (CGT) on the property. Given that this could be either 18% or 28% depending on a number of different factors, and depending on how you claim Private Residence Relief for the time you lived there, plus your usual CGT anual exemptions, you are talking about potentially quite a lot of CGT.

Therefore, you would be extremely well advised to speak to a UK based accountant BEFORE you try and sell the house.

https://www.gov.uk/tax-sell-property/selling-overseas-property

Jan 1, 2021 15:01
becasse

I assume that you declared the rental income from the flat on your UK tax returns once you had returned there? Just because the income was tax free in Belgium doesn't make it tax free in the UK.

Jan 1, 2021 20:53
tapeloop

Many thanks to those who responded about selling the flat. Really appreciate the information.

Yes, figured I’d be liable for Capital Gains Tax - in the UK at least. I hope that, with Brexit, I won’t be liable for it in Belgium too...

Jan 3, 2021 12:21
J

It was your main residence for 10 years, then rented out for 10 years, so you'll only be liable for CGT on 50% of the gain.
Over 10 years, you have 10x the annual CGT allowance to use up, so that's around £120,000.
So your apartment would have to be worth in excess of about €350,000 before you might start to have enough capital gains to need to be paying tax.

I would recommend that you contact an estate agent or two. In the current market, the 3% that these scumbags charge will at least make sure that you get top whack for the property and that all the legal aspects and visits can be done without you having to be in Belgium in person to oversee things. An estate agent's ability to push prices is particularly valuable to you. You may be pleasantly surprised.

Jan 3, 2021 14:41
anon

@ tapeloop. You should always be careful believing what people say on the internet (including me). However, what "J" says above about having 10x annual allowance or £120,000 of CGT allowance is, I'm afraid, complete nonsense. The CGT allowance is an annual allowance which can be used once against realized gains in any particular year. You either use it or lose it., it does not accumulate over time.

You will have gains taxes to pay on the entire gain, less any allowances such as the Priciple Primary Residence relief for the period that you lived there. Also, you will legitimately be able to deduct expenses on the property such as any money you spent on the property upkeep during the period, as well as legal fees etc. Depending on what your marginal tax rate is in the U.K., you're going to be liable for either 18% or 28% CGT, so getting proper advice could very easily save you thousands of pounds in tax.

Another reason that you may want to get professional advice is timing. It is possible that selling now, or in the next tax year after 5 April could have an impact on how much you have to pay, depending on your income and if you have any other gains.

Jan 3, 2021 16:16
J

I don't think I'm quite as wrong as you think I am ANON, but it was nearly 20 years ago. The advice I got came straight from the Inland Revenue. You should still be able to call them and get advice on how to deal with it.

Jan 4, 2021 13:41
anon

Sorry J, but I'm afraid you are completely wrong. This is a really fundamental basic principle in UK Capital Gains tax calculations and is not easily open to misinterpretation.

@ tapeloop - there is a calculator on the HMRC website you can use to make a rough calculation of what you would be liable for here:
https://www.gov.uk/tax-sell-property/work-out-your-gain
There is a big green button at the bottom of the page: "Calculate Capital Gains Tax on property"

The variables that you can input are what your costs were on purchase, what your costs were on sale, and the costs of any improvements. Then you also need to calculate how much Private Residence Relief you are entitled to.

Essentially you just count the number of months you lived there. However, there are all sorts of quirky rules in there that you need to be aware of, for example "Your period of ownership begins on the date you first acquired the dwelling house, or on 31 March 1982 if that is later. It ends when you dispose of it. The final 18 months of your period of ownership always qualify for relief, regardless of how you use the property in that time, as long as the dwelling house has been your only or main residence at some point."

Which is why again, I would strongly suggest that you take professional advice from someone who knows and understands the system.

Jan 4, 2021 15:17
tapeloop

That’s very helpful. Thanks for the info. Much appreciated.

Yes, will be seeking professional advice when the time comes. Seems like there’s a lot of factors which will come into play.

Jan 4, 2021 19:39