From 1 January 2026, businesses investing in real estate will need to comply with a new rule: the revision of VAT deduction on investment services. This change, introduced in the 2025 Tax Plan, affects large-scale renovation and maintenance services that deliver long-term value. The goal is to align VAT deduction more accurately with how a property is actually used over time.
What investment services fall under the new VAT revision scheme?
The updated VAT revision rules apply only to substantial investment services related to immovable property, including:
professional painting services
insulation and energy-efficiency improvements
roof renovation or replacement
demolition work as part of a building renovation
installations and materials permanently integrated into the building (e.g., piping, heating systems, integrated machinery)
For the regulation to apply, the service must involve a minimum value of €30,000. Smaller renovation or maintenance activities remain excluded.
These services qualify because they provide a multi-year economic benefit, similar to traditional capital goods.
VAT deduction no longer final in the year of service
Under the current system, businesses claim VAT deduction in the year the service is performed, and this deduction becomes final.
From 2026 onward, that will change.
VAT on qualifying investment services will be subject to a four-year revision period starting from the year the service is first put into use. During this period, entrepreneurs must annually assess whether the ratio between taxable and exempt use of the property has changed compared to the initial year.
If this ratio shifts by more than 10%, the VAT deduction must be adjusted upward or downward accordingly.
This ensures that VAT deduction more accurately reflects the actual use of the property over several years.
Why is the VAT revision being expanded?
The expansion aims to create fairer and more consistent VAT treatment for services that yield long-lasting benefits. Large renovation and improvement services often have the same economic impact as capital investments in real estate. By introducing a revision period, the government ensures that VAT deductions better match real economic use.
When will the new VAT revision apply?
The new VAT revision scheme applies to all investment services first put into use on or after 1 January 2026.
In practice, the moment of “first use” will generally correspond with the completion date of the renovation or improvement.
