Following the Flemish and Walloon Regions, Brussels finally introduced the possibility to cancel an agreement related to the transfer of a real estate asset without adverse tax consequences.
Before this possibility, the transfer taxes of 12.50% were due at the signature of the (private) sale agreement, and the reimbursement as such could only occur pursuant to a proper judgment pronouncing the cancellation of the agreement. Moreover, the cancellation without this judgment Real Estate Investment and Taxation 3 could also lead to the collection of transfer taxes for a second transfer (assumption of sale-back to the initial seller).
- Specific fixed duty of 10 EUR
In case of agreement acting the transfer of (i) the full ownership of a real estate asset, (ii) a right to build, or (iii) an usufruct, parties have one year to submit a mutual cancellation of the agreement to the relevant tax administration.
As the case may be, the mutual cancellation agreement shall be subject to a specific fixed duty of 10 EUR, and the transfer taxes of 12.50% (i) shall not be payable anymore, or (ii) shall be refunded in case they have already been paid to the tax administration.
This new regime is also applicable in case of cancellation by operation of a condition subsequent within one year from the execution of the initial transfer agreement, subject to an authentic deed being submitted to the tax administration.
- Entry into force
This possibility applies to any (private) sale agreement concluded since 29 December 2016. Legal sharing, donation and swap of real estate assets are also aimed by the law.
Flanders and Wallonia
Similar mechanisms already exist since 2007 in the Flemish Region and since 2009 in the Walloon Region: a fixed duty of 10 EUR shall be paid for the (private) sale agreement and for the cancellation agreement. If transfer taxes have already been paid, they can be refunded provided the fulfilment of certain conditions.
The scope of the Walloon regime is slightly broader and the implementation conditions of both mechanisms are not exactly similar but both enable, for some time already and in an easy way, the cancellation of a private (sale) agreement almost for free and without legal proceedings being required.
