The new rules, once applied, would lead to new negotiations on how the federal government and the regions divide up the tax revenue. At present, Flanders and the other regions levy a “registration tax” on building land, while VAT goes to the federal government.

The Building Confederation, meanwhile, expressed fears for job prospects if the government were to essentially double VAT on land. Because of the economic crisis and job uncertainty across industry, the number of building permits for new homes has fallen this year by 17%. An increase in the tax burden on new building would cause that slide to get worse as prospective homeowners either opted for existing houses or deferred construction until better economic times. The construction industry is now awaiting measures from the government to compensate for the increased VAT.