House split buying according to legislation

Split buying allows you to buy a home on a smaller starter budget. What is it? What is the progression? And what are the pros and cons?

What is split buying?
What is the course of split buying?
What if the superficies expire?
What are the benefits?
What are the drawbacks?

What is split buying?

Split buying means that as a buyer, you buy a home but not the land on which it stands. The land remains the property of another party, often an investor, developer or government. Instead, you get a right of superficies. Right of superficies gives you the right to own and use the property on the owner’s land. The right of superficies is legally recorded in a superficies agreement (notarized deed) and has a term of up to 99 years. In exchange for the use of the land, you must pay an annual superficies fee.

What does the right of superficies entail?

Right of superficies is getting the right to build on someone else’s land for a certain duration. You enter into an agreement with the building lender with all the details. The term of the agreement is up to 99 years. In exchange for the right of superficies, you pay a periodic (usually annual) fee called: superficies fee, canon or cijns.

What is a superannuation fee?

A superficies fee (also called canon or cijns) is the annual or periodic fee a superficies owner pays to the owner of the land. This fee compensates the owner for the use of his land. The amount of the superficies fee is set in the superficies agreement and depends on:

Land value.
The duration of the agreement.
Any indexations or revisions during the term.

The fee can be paid in different forms, such as a fixed amount per year or a percentage of the land value.

Split buying_Look at plot plan — Image: magnifying glass on plot plan

What is the course of split buying?

The buyer enters into a purchase agreement the purchase of the property, including a right-of-way.
The buyer and seller draw up a building contract in a notarized deed. This contains the terms, rights and obligations of the right to use the land.
The notary will register the deed with the competent office of legal security.
The buyer pays the agreed periodic superficies fee (canon) to the owner of the land.

What if the superficies expire?

When the superficies expire, what is set forth in the superficies agreement happens. For example:

The ownership of the structure becomes the property of the landowner. Depending on the superstructure agreement, the landowner must pay a fee to the superstructure owner.
The buyer purchases the building land from the landowner. From this point on, as a buyer, you no longer have to pay a building fee, but you do have to pay a regular repayment to your bank of choice.
The building lease is renewed, by entering into and new agreement (without exceeding the legal term of 99 years).

Upon termination of the superficies agreement, it is best to contact a notary or legal advisor for advice.

Split buying_Low building land with grass — Image: Empty building lot with grass

What are the benefits?

Because you do not initially buy the land, the purchase price and required equity in the home is lower.
Because of the lower purchase price, your mortgage payments are lower.
The right of superficies allows you to resell the property to new owners, provided this is provided for in the deed.
When the building lease expires, you can buy the land (if so provided in the building lease) at the originally agreed price. Thus, if the value of land has increased during the building lease term, you buy the land for a lower price than the market price.

What are the drawbacks?

As a buyer, you must pay a periodic fee to the owner of the land.
The right of superficies is temporary (maximum 99 years).
Contracts are often complicated and require accurate and correct legal advice.
Depending on the agreements in the building contract, you have less control over the land on which your home sits.

Split buying_Building land with home building staff — Image: Building land with housing construction staff

Sources: Construction and Housing, Desdalex, VRT

Would you like to cite this article as a source? Then use:

Stiasteny, L. (2024, Nov. 21). Home split buying according to legislation. Apartment.be. Consulted on (date XX/XX/202X), from https://www.appartement.be/woning-splitskopen-volgens-wetgeving/

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