Brussels, Belgium | Availability-Legislation Link for Extended-stay

Rosie Thapa

Industry News, Relocation and Global Mobility, Situ News, Situ White Paper, Travel, Travel News

Brussels welcomes large numbers of tourists and business travellers every year and ranks within the 200 most important business cities in the world. On 1 July 2022, new rules around VAT and furnished accommodation came into effect.  

Brussels, Belgium | Exploring the Availability-Legislation Link for Extended-stay Accommodation

These rules make a distinction between hotels and motels and ‘establishments with a similar function’ (e.g., B&Bs, recreation parks, student accommodation, etc.) and clarifies when such accommodation is subject to VAT.  

These properties are subject to VAT at the reduced rate of 6% if the stay does not exceed three months. Over this duration the stay is VAT-exempt. This means that operators of student accommodation, for example, can no longer apply VAT on the rental of furnished student rooms that include hospitality services, and then recover VAT on their investments and costs – this situation is likely to have been one of the drivers for this change in rules.  

A foreign national staying in Belgium for longer than three months must report to the municipality in which they are staying within eight days of arrival to be entered onto the National Register. But crucially, staying in a hotel is not a viable option to obtain a residence visa in Belgium. This can pose a problem for those who aren’t relocating but who are in Brussels for more than 90 days. 

Businesses that provide a mixed offering of both short and extended stays, but that are classified as a hotel are affected by this new rule, such as the 127-suite Residence Inn by Marriott at Brussels International Airport. Managed by Cycas Hospitality, the property opened in April 2021 and offers studios and one-bed suites for both short-term and extended stays. 

According to General Manager, Petra Baer, the new regulations pose quite a challenge, “Because we are unable to register the guests here…on the 91st day they have to register and cannot,” she says. 

Petra goes on to explain that the VAT compliance is, in itself, not an issue beyond the additional administration; rather, it is the registration rule not applying to hotels that is the problem. And although Petra notes that at the present time the situation frees up availability for transient business at a higher ADR, it potentially impacts the business model in the long run, which is obviously also based on extended stays. “It’s a disadvantage in low-demand periods,” she notes, “If you have a group of 15 engineers, for example, coming from outside Schengen, they cannot be booked into my hotel because I’m unable to provide them with the registration.” 

As with other cities and countries around the world, this shows that new regulations brought in to address a specific issue often have unintended consequences for other parts of the extended-stay accommodation market.  

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