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Do you now have to charge VAT on the rental of your furnished apartment?

Tuesday 30/08/2022

The VAT rules for the provision of furnished accommodation and supplementary services have changed significantly since 1 July 2022. Can you now reclaim the VAT on your property investment if you rent out via Airbnb, Ardennes Etappes, Belvilla or another platform?

Charging VAT subject to conditions

If you usually rent out your holiday home for less than 3 months, you have been obliged to charge 6% VAT on bookings for rentals with supplementary services made since 1 July via a non-recognized platform. As a result, you can also exercise your right to deduct VAT for any costs incurred for this VAT activity.

Three types of landlords

The new VAT rules make a distinction between 3 categories of landlords:

  1. Hotels and motels that provide furnished accommodation for a period of less than 3 months supply a taxable service for which VAT must be charged. In other words, only the contractual duration must be taken into account.
  2. Establishments with a similar function to a hotel or motel where accommodation is typically provided to paying guests for a period of 3 months or more. The provision of furnished accommodation is VAT exempt, even if the rental period is less than three months.
  3. Establishments with a similar function to a hotel or motel where accommodation is typically provided to paying guests for a period of less than 3 months. If they provide furnished accommodation for a period of less than 3 months, this service is subject to VAT if the establishment additionally provides at least one supplementary service. If not, the rental is exempt from VAT.

‘Ordinarily’ refers to the normal duration that the establishment provides furnished accommodation to paying guests.

Rental period of 3 months

To simplify the procedure the VAT administration accepts a method of calculation ‘from such and such a day to the day before such and such a day, minus one day’. The calculation of the limit is based on the duration stipulated in the agreement. Extensions of the duration and successive agreements shall take into account the full duration.

What are supplementary services?

The provision of furnished accommodation for a period of less than 3 months is subject to VAT only when at least one of the following additional services is provided:

  • A physical presence to welcome guests on site for at least a significant part of the day. Telephone based or digital reception or the mere handing over of a key are not sufficient.
  • The provision of household linen such as bath or bed linen and its replacement at least once a week if the furnished accommodation is provided for more than one week. Making beds is not a necessity.
  • The provision of a daily breakfast by the landlords themselves or by a third party on behalf of the landlord. Breakfast vouchers, take-out breakfast or home delivery are acceptable.

There is no requirement to provide this service(s) in conjunction with furnished accommodation at an overall price. Charging a supplement is acceptable. It is important that the supplementary services be paid for together with the accommodation and that the service(s) is/are actually provided rather than merely offered.

When do you have to start charging VAT?

The provision of furnished accommodation is subject to the reduced VAT rate of 6%.

If you usually rent out your accommodation for a period of less than 3 months and concurrently provide at least one supplementary service, you need to start charging VAT from the first euro of turnover you achieve.

If you rent out property but not on a professional basis and provide your accommodation via a recognized electronic platform, you do not have to charge VAT if you opt for the sharing economy system. To this end, the following conditions must be met:

  • You are a natural person to whom the exemption scheme for small businesses (turnover threshold of €25,000 per annum) applies.
  • The property is located in Belgium.
  • The services are provided for purposes other than those of the taxpayer's economic activity.
  • The services are provided exclusively to natural persons who allocate them for their private use or that of other persons.
  • The services are provided solely within the context of agreements established through the intervention of a recognised electronic platform.
  • The fees related to the services shall be paid or allocated to the service provider only by the recognised platform (or through the intervention of this platform).
  • The annual turnover (rental fees + any sums retained by the platform as part of the sharing economy) does not exceed €6,540 for 2022.

Good to know: Airbnb is not (yet) a recognized platform. If you are using this platform you cannot benefit from this scheme. Consult the list of recognised platforms here

When will this new regulation take effect?

The new rules took effect on 1 July 2022 and apply to services for which VAT has become due since that day. However, the administration accepts that they will be applied to accommodation booked as of 1 July 2022.

Right to deduction?

If you have to charge VAT, you can deduct (part of) the VAT on any costs you incurred that are related to the taxable service from the VAT payable by you. This includes VAT on the purchase or renovation of the holiday home. You can also still partially deduct the VAT you paid before 1 July 2022, for the remaining time of the review period. But remember that the VAT for private use is not deductible.

If you have further questions about this or would like to find out how these new rules affect your rental, please do not hesitate to contact our VAT team.

Contact one of our experts

Wouter Brackx

Wouter Brackx

Partner Tax & Legal Services

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Vicky Marievoet

Vicky Marievoet

Associate Tax & Legal Services

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