Wallonia lifts ban on indexing rents for the most energy-intensive housing

Lessors of energy-inefficient housing in Wallonia and Flanders will be able to index their rents from autumn 2023.

For almost a year, landlords of low-energy-performance homes have been unable to index their rents - or only to a limited extent. As of November 1 in Wallonia and October 1 in Flanders, this indexation freeze comes to an end, as these two Regions have decided to lift this temporary measure.

The Brussels Region, meanwhile, has not ruled out extending the indexation freeze. "This system will apply from October 14, 2022 to October 13, 2023. Brussels Secretary of State for Housing Nawal Ben Hamou (PS) intends to discuss this issue and its possible extension again with her colleagues in the Brussels government during September", explains her spokesperson.

Energy crisis

"The purpose of this temporary measure was to act as a social corrective, to limit the disproportionate indexation of rents by applying the health index, which underwent an exceptional rise to 12% due to the inflation of energy prices against the backdrop of the war in Ukraine", points out Walloon Housing Minister Christophe Collignon (PS).

In fact, the indexation ban was intended to protect tenants from high energy prices, which had literally rocketed last summer, with a greater impact on occupants of low-energy score dwellings.

As of October 2022, in Wallonia, only rents for homes with a PEB A, B or C can be fully indexed. Indexation is limited to 75% for PEB D and 50% for PEB E. Above this level (PEB F and G), indexation is prohibited. In the Brussels Region, only rents for units with a PEB A, B, C or D may be indexed. Indexation is limited to 50% for PEB E and prohibited for PEB F and G.

Special calculation method

However, this lifting of the ban does not mean that landlords will be able to make up for the indexation lost last year by carrying out "double indexation".
In Wallonia, a special calculation method is used to index the rent of homes with a PEB D, E, F or G rating.
In Flanders, a correction factor must be introduced into the indexation formula.
For example, a tenant whose rent was 800 euros/month for an energy-intensive property in October 2021 will pay 832 euros/month from October 1 in Flanders. Without the correction factor, the rent would rise to over 925 euros, illustrates Flemish Housing Minister Matthias Diependaele (N-VA). In his view, this will restore the balance between landlords and tenants in the private rental market. "We encourage landlords to create sufficient supply while protecting vulnerable tenants as much as possible."

"This measure has prompted some owner-landlords to renovate their homes," analyzes Christophe Collignon.

SNPC opposes any extension

The Syndicat national des propriétaires et des copropriétaires (SNPC) and its Dutch-speaking counterpart Verenigde Eigenaars (VE) are opposed to any extension of the indexation freeze, arguing that "inflation has fallen sharply and there is therefore no justification for a renewal". They also point out that they have lodged appeals with the Constitutional Court against these measures, whose rulings could be expected by the end of 2023, or even early 2024.

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