Thornsett Group

Why do people always forget Belgium?

Brussels has long been overlooked as an investment property market. It is a city which has avoided the ‘boom and bust’ cycle of many other cities. Couple this with generally lower price per square foot compared to other European capitals and strong rental yields and it’s clear that Brussels in fact have great investment opportunity for the savvy buyer.
  More on the property market to follow, but first a bit about the most underrated capital of Europe –
Most people associate Brussels with chocolate and beer, the EU parliament, but scratch the surface and a sophisticated, stylish and cosmopolitan city (and the greenest city in Europe) shines through. Brussels is well connected to both Paris and London (reachable in just under 2 hours via Eurostar or Thalys) as well as Amsterdam via the new high-speed train link. Divided into ‘communes’, each area of Brussels ahs its own flavour, meaning every investor’s taste is catered for. For investors not deterred by the relatively high costs associated with buying property in Brussels (an extra 15-20 % on top of the cost of the property, and new builds have 21 % VAT added), the initial expense is offset by high rental yields and stability of the market.
Belgium has a strong economy – the GDP rose 2.1 % year on year to Q3 2010, with growth projected to be 1.3 % for 2010 and 1.6 % for 2011 which has fuelled growth in the property market.
During the recession, the rate of sales slowed down but – unlike in many other European cities – prices remained steady and did not plummet.
Property prices only dropped by 1% during the recent crises compared to 6% in Portugal and more significant drops in France. In the past 12 months, property prices have risen 5%: between September 2009 and September 2010, there was an 8% growth and property investors have seen rate of sale increase dramatically since July 2010.
Strong rental yields have been seen by investors in the Brussels property market. A 2-bedroom apartment bought for €330,000 can be rented for €1,700 a month, giving rental yields of 6.1 %, add capital appreciation to this figure and investors are rewarded with strong yields of around 11%.
For investors looking to make vast quantities of profit, Brussels might not be right, but for those savvy investors looking for a safe place to invest money with steady long term capital growth, Brussels property has consistently retained its value. No GCT is payable by owners on residential property if held for more than five years and no CGT is payable on shareholder transactions, an attractive option for those looking for a long-term investment.
No tax payable on rental income if the property is privately owned. Instead, owners pay the flat annual tax known as ‘précompte immobilier’. Rents are automatically adapted on a yearly basis in accordance to cost of living which works in the landlord’s favour.
Buy-to-let investors are rewarded in Brussels, by a large, transient, rental pool – Brussels is the headquarter of the European Union & NATO, various NGOs and multinationals such as P&G, L’Oreal and Huntsman. They all employ thousands of foreign staff which means the rental market is unlikely to shrink anytime soon. In addition, Belgium is a country of renters: over 60% of the population rents for ling periods so investors will never be short of a tenant or two.
If you are looking for a relatively secure medium-to long-term earner, Brussels is the place. Not the location for a quick buck, rather a property market which is strong and stable and idea for a long-term investment.

Eoghan Quinn,
Commercial Director of Thornsett Belgium