VAT in Belgian Construction 2025-2026: Complete Guide to New Regulations

📅 Key Dates 2025-2026

July 1, 2025	Fossil fuel boilers → 21% VAT
July 1, 2025	New demolition/reconstruction system for all of Belgium
January 1, 2026	Mandatory B2B e-invoicing via Peppol
March 31, 2026	End of the transition period for e-invoices

The construction industry in Belgium is currently undergoing some of the most significant tax changes in years. As of July 2025, new VAT regulations have come into effect, directly impacting how construction services are invoiced. If you run a renovation, development, or installation company, you must be aware of these changes – otherwise, you risk fines up to 200% of the due tax amount.

In this article, we explain the most important changes and show you how BuildHub AI can help you meet the new requirements without unnecessary stress.

6% VAT Rate on Renovations – Still Applicable, but with New Rules

Good news for companies involved in residential building renovations: the reduced VAT rate of 6% remains in effect. However, significant changes regarding its application have been introduced as of July 1, 2025.

Conditions for Applying 6% VAT

Requirement	Details
Building Age	First occupancy at least 10 years ago
Purpose	Minimum 51% of the area for private residential use
Work Execution	Materials must be supplied AND installed by the contractor
Documentation	Declaration on the invoice regarding the conditions for 6% VAT

Important: Since July 1, 2022, every invoice issued with the 6% rate must include a special declaration informing the client about the conditions for applying the reduced rate. The client has one month to submit a written objection – if no objection is received, their consent to your billing is assumed.

Fossil Fuel Boilers vs. Heat Pumps – A Key Change

This is one of the most controversial changes that will affect many installation companies. The table below shows the differences:

Type of Installation	VAT until 06/30/2025	VAT from 07/01/2025	Difference for the client*
🔥 Gas Boiler	6%	21%	+€1,200
🛢️ Oil Boiler	6%	21%	+€1,500
♻️ Heat Pump	6%	6%	€0
☀️ Solar Panels	6%	6%	€0

* Based on a net installation value of €8,000

VAT Comparison: Fossil Fuels 21% vs. Renewable Energy 6% — VAT Rate Comparison for Different Heating Systems in Belgium from July 2025

Transitional Provision for Boilers

If you signed a contract with a client before July 28, 2025, and manage to issue an invoice by the end of June 2026, you can still apply the 6% rate. This is why archiving all contracts with their dates is so crucial!

💡 Practical Tip

Archive all client agreements along with their signing dates. This will allow you to prove your right to apply the preferential VAT rate during the transitional period.

Demolition and Reconstruction – A New System for All of Belgium

Until the end of June 2025, the preferential 6% rate for demolition and reconstruction projects was applicable only in 32 cities. As of July 1, 2025, the system covers all of Belgium, but new limitations have been introduced:

New Surface Area Limits

Type of Transaction	Limit until 06/30/2025	Limit from 07/01/2025
Sale of Reconstructed Property	200 m²	175 m²
Construction Works Covered by 6%	200 m²	200 m² (no change)

Three Settlement Paths

Path	Requirements	Surface Area Limit	MyMinfin Form
Owner-Occupier	Registration immediately after completion, minimum 5 years of use	200 m²	Yes
Social Rental	15 years of social rental	No limit	Yes
Private Rental	15 years of private rental	200 m²	Yes

Important: The MyMinfin declaration number must be submitted before commencing work!

Peppol E-invoicing from January 2026

From January 1, 2026, every company in Belgium issuing B2B invoices must use the Peppol BIS 3.0 format. This is not an option – it is a legal obligation.

What Does This Mean in Practice?

❌ PDF, Excel, paper invoices do not meet the requirements
✅ XML format compliant with the Peppol standard is required
✅ Each item on the invoice must have a VAT category code
✅ Automatic exchange via the Peppol network

Implementation Schedule

Date	What Happens
January 1, 2026	Start of mandatory B2B e-invoicing
January 1 - March 31, 2026	Transition period (no penalties for good faith)
April 1, 2026	Full enforcement with penalties
January 1, 2028	Real-time e-reporting to tax authorities

How BuildHub AI Can Help You Meet New Requirements

In the face of so many changes, having the right invoice management tool is no longer a luxury – it’s an absolute necessity.

BuildHub AI is a tool designed for construction companies operating in the Belgian market. We are developing features to help manage complex VAT requirements and prepare for upcoming e-invoicing changes.

Want to check current capabilities? Try the demo account and see how BuildHub AI can support your business.

FAQ – Frequently Asked Questions

Can I still invoice a gas boiler at a 6% rate?

Yes, but only if the contract was signed before July 28, 2025, and the invoice is issued by June 30, 2026. After this date, the 21% rate applies without exceptions.

What if I am renovating an 8-year-old building?

Unfortunately, the building must be at least 10 years old from its first occupancy. For younger buildings, the standard 21% VAT rate on construction work applies.

What are the penalties for incorrect VAT rate application?

Penalties can reach up to 200% of the due tax amount, plus interest and legal costs. For a €10,000 invoice with an incorrectly applied rate, this could mean a penalty of over €3,000.

Do I need to prepare for Peppol now?

Absolutely! There is less than a year until January 1, 2026. Choose an Access Point provider, obtain your Peppol ID (format: BE + VAT number), and test the system before the deadline.

Summary

The new VAT regulations in Belgian construction may seem complex, but they represent an opportunity for companies that can adapt. Clients are increasingly looking for contractors who manage their documentation professionally and do not surprise them with hidden costs.

Remember: Penalties for incorrect VAT rate application can reach 200% of the tax amount. Investing in the right tools is not an expense, but insurance against potential losses.

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