Engel & Völkers Licence Partner Regional Office Belgium > Blog > Construction or renovation: decoding two solutions.

Construction or renovation: decoding two solutions.

It's decided you want to become a homeowner but you hesitate between construction and renovation. Two solutions, each with its own advantages and disadvantages. Engel & Völkers deciphers for you the elements that will help you choose between these two very different projects.

The price

To build or renovate is to have to choose between new and old real estate. Two different options, particularly in terms of price per m². On average, in Belgium as a whole, you can expect just over €1400/m² (including 21% VAT and architect) to build. Obviously this price per m² remains an average and will ultimately depend on the constraints of the land and the level of finishing required. A high level of service usually increases this price per m² between 1800 and 2000 euros. The budget required for the construction will also have to take into account the cost of acquiring the land. A land price to be built varies greatly according to the region and even from one municipality to another. For comparison, the figures published by Stabel (Belgian statistical office) at the beginning of 2018 indicated an average price of 221,061 euros for an ordinary house on the old one's market throughout the country. Depending on the size of the renovations to be undertaken, the acquisition cost may be lower than this average figure. Nevertheless, it will have to be taken into account that the average cost per m² of the renovation will be between 1100 and 1200 euros, subject to an advantageous VAT rate of 6%.

Taxation of new and old

The taxation of new property is divided into two parts: the first part related to the acquisition of the land is subject to the registration fees applicable in the region concerned (see below). The second one related to construction is subject to a VAT of 21% to which are added the deed costs, i.e. the notary's fees (1% excluding tax). If the old one generally has a lower price per square meter than the new one, the registration fees related to the transfer of existing property can be high. A comparison to be made with regard to the different tax systems applied by the 3 regions of the kingdom. Thus in the Walloon region, you will have to take into account a rate of 12.5% with a discount on the first 20,000 euros (2500 euros saved), in the Brussels region the rate is the same but the discount is on the one hand reserved for acquisitions below 500,000 euros and on the other hand much more interesting since it applies to the first 175,000 euros (21,875 euros saved). In the Flemish region, the general registration rate is normally set at 10% but can be reduced to 7%. In addition, the Flemish administration grants a discount to purchasers of a house at a price less than or equal to €200,000 (220,000 if the property is located in a city centre or in the Flemish periphery of Brussels).

Tailor-made or authentic

By choosing to build, you give yourself the opportunity to design a home that meets all your expectations. Living space, number of rooms, position of the windows, heating system, special services, architectural style and decorative choices, you decide everything with your architect and builders. You get the house of your dreams according to your budget capacities. Renovation gives you the opportunity to combine the authenticity of the old with modern comfort. When buying a house of character to renovate, your ability to adapt is certainly limited by the existing building, but not totally non-existent. A good architect will be able to offer you solutions to redevelop the space in order to best meet your requirements. Well mastered, renovation techniques today offer excellent results in terms of both quality of life and aesthetics.

Energy standards and performance

In Belgium, housing standards are precise and tend to become more stringent. They are intended to protect the occupants as well as to preserve the environment. This is the case in particular for the RGIE (Regulation of Electrical Installations) and the PEB (Regulation of Energy Performance of Buildings). By building your home, you are assured of a property that meets all applicable standards. The new and safe electrical installation will not be a source of concern as it can be in the old one. From the floor to the roof, from the walls to the sashes, the insulation, carried out in accordance with the rules of the art using modern techniques and materials, will offer you optimal energy performance. When renovating, upgrading to electrical standards can be complicated and costly, as can the installation of high-performance insulation. Two items of expenditure that should not be neglected when budgeting the operation as they are so essential. In any case, keep in mind that a good house is first and foremost a safe home for the whole family and a home that saves your wallet when it comes to heating or cooling it!

The immediate environment

The environment of a property is as important to the quality of life as the quality of the property itself. Most often when you build, you do it in an area to be urbanized. The immediate environment of your plot of land is itself available for construction and you cannot be sure what will be built on it. The bucolic environment that gave you your heart's desire may only be a distant memory in a few years' time. By choosing renovation, you most often opt for an environment that is already built and developed: you have a clear idea of what you are committed to and what your future living environment will be like.

The guarantees

By having your house built, you will have a ten-year guarantee on the structure and strength of the building upon delivery, which protects you in the event of danger due to a construction defect. This ten-year responsibility of the builder and architect also covers all defects in the ground, both apparent and hidden. In practical terms, if your new home cracks to the point of endangering the building, you are covered. When renovating, you have no guarantee on the structural work. You take the house as it is, whereas it is sometimes difficult for a non-expert to apprehend the latter accurately. It is quite common to see the cost of renovation work soar as unpleasant surprises reveal unexpected problems!

You can see that construction and renovation are moving you in two quite different directions. Both have their advantages. Your personal priorities will guide you towards one or the other. Engel & Völkers is a reference in real estate and can help you find the project that really suits you. A complete discovery of your deepest aspirations. Thanks to its perfect knowledge of the markets in Flanders, Wallonia or Brussels, your Engel & Völkers agency presents you with new projects, building land and the best opportunities for properties with character to renovate. Expert and personalized advice to help you acquire the new or renovated house of your dreams!

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Engel & Völkers
Licence Partner Regional Office Belgium

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