NEWSLETTER: OVERVIEW OF NEW ARRIVALS COMING INTO FORCE ON JANUARY 1, 2020

As part of our newsletters, we have deemed it appropriate to start this new year with the major innovations that came into force on January 1, 2020.
We will briefly analyze these different points at the national level, then regional.

NATIONAL MORTGAGE LOANS

Since 1 January 2020, the National Bank of Belgium recommends that Belgian banking institutions and insurance companies be more careful when it comes to granting a loan whose amount exceeds 90% of the value of the property.

Previously it was possible to borrow up to 125% of the purchase price, including acquisition costs. Although this has not been the case for some time, the BNB finds that the banks are still being too lax and has therefore set a series of thresholds. In other words, you need to have savings before you go to get financing for the purchase of a home.

In concrete terms, if you take out a mortgage loan for your family home, you can only borrow 90% of the purchase value. This means that you will have to put the remaining 10% out of your pocket, as well as the costs of acquisition.

If the frequency of 100% lending will become increasingly rare, no prohibition is to be reported. Indeed, the BNB is well aware of the importance of this type of loan for certain buyers. It will therefore always be possible to borrow 100% of the value of the property provided that you can justify your case. The NBB will also limit the number of loans to 5% to 100% or more, and only for first-time buyers. Clearly, this means that banks can have a clientele made up of 35% borrowers at 90% (and maximum 5% for loans at 100%).

The conditions imposed are even more stringent for rental investment transactions, for which the loan cannot exceed 80% of the value of the property. Here too, the National Bank grants a margin of tolerance: 10% of the total volume loaned can relate to a higher quota, without however exceeding 90%.

According to the federation of the financial sector, at present, defaults are limited to less than 1% of all mortgage loans, proof that Belgium practices "a sound policy of mortgage credit".

REGIONAL FLANDERS

The first big change on the Flemish side is the disappearance of the housing bonus, considered counterproductive compared to prices. The advantage will remain with those who have benefited from it and its removal will only affect new loans. In return, registration fees will drop from 7 to 6%.

Then, the energy requirements tighten for new homes. So we go from the level of energy consumption (level E), from E40 to E35 in 2020 with the aim of reaching level E30 in 2021.

Finally, equipping any accommodation with smoke detectors has become compulsory. If this obligation was already applicable for the rental market, it has been generalized since January 1, 2020. Thus, one detector per floor will be required in order to comply with the new regulations.

In Wallonia, such an obligation already exists, while in Brussels, only rental accommodation must be equipped with these detectors.

RÉGIONAL WALLONIE

This January 1, 2020 came into force the new farm lease.
Among the main directions, we can retain the following elements:

The obligation to have a written and registered lease.
In order to promote access to land by young farmers, the term of the lease has been revised. Career and long-term leases will be set up and supported by tax incentives.
The parties must carry out an inventory.
Exchanges of plots must be notified.
End of the right of first refusal for farmers over 67 years old, without serious buyers and benefiting from a pension.
A short-term lease (up to 5 years) and an end-of-career lease will be put in place.
The right for public authorities to include environmental clauses in leases.

We hope that this letter has been instructive and that we will have the opportunity to collaborate, or renew our collaboration together, during this year.

We thank you for your confidence.

Lecobel Vaneau
Place Brugmann 11, Ixelles 1050
Tel : +32 2 340 72 70
@ : lecobel@lecobel.be