Selling your home to the municipality: how it works and what price you get

Do you want to sell your home to the municipality, or has the municipality itself shown interest in your house or land? Then the sale works differently from a sale on the open market. There is no bidding round, the price is based on an official valuation and the municipal council makes the decision. Below you can read how such a voluntary sale works step by step, what to look out for and how to check whether the offer is fair.

Why a municipality buys a home

Municipalities buy property for a wide range of projects. Think of a new square or park in the village centre, a school or childcare centre, extra parking spaces, a cycle path, the redesign of a crossroads or social housing together with a housing company. Sometimes it is a single plot that completes a larger project, sometimes a whole row of houses in an area the municipality wants to redevelop.

This article is about a voluntary sale: you decide yourself whether you sell and on what terms. A public authority can acquire a home in two other ways. With a right of pre-emption, the authority may buy first when you are already selling to another buyer. You can read more about this in our article what is the right of pre-emption in real estate. With an expropriation, the authority can also acquire your property against your will for a project in the public interest, in exchange for compensation. We cover that process in our article on the expropriation of your home and the compensation.

An amicable offer from the municipality can, however, be the first step towards a later expropriation. So always ask whether a spatial plan, a project decision or an expropriation plan already exists for your plot. That determines how much room for negotiation you really have.

How does a sale to the municipality work?

The initiative can come from the municipality, but you can also offer your home yourself to the property or real estate department of your municipality. The municipality is not obliged to accept your offer. If it is interested, the process usually looks like this:

• Valuation. The municipality has the value determined by an independent valuer, such as a surveyor-expert, a notary or, in Flanders, the Real Estate Transactions Division of the Flemish Tax Administration. That valuation report is the basis of the offer.
• Negotiation. You discuss the price, the date on which you vacate the home, what happens to any tenants and whether you can stay on for a while.
• Decision. The purchase has to be approved by the municipal council, or by the board of mayor and aldermen if the council has delegated that power to it. Only after that decision is the municipality bound. A verbal agreement with a civil servant or alderman is therefore not yet a sale.
• Deed. The sale is recorded in a notarial deed or in an administrative deed, executed by a public body authorised to do so. Both have the same legal force.
• Payment. The price is paid after the deed. Have the payment term stated explicitly in the deed.

Expect several months from first contact to deed. The municipal council usually meets monthly and the purchase has to fit within the budget.

What price can you expect?

In principle, a municipality pays the valued price. A local authority handles public money and has to be able to justify a price above the valuation. That is why there is usually little room above the valuation report. That does not mean the first offer is set in stone. A valuation can rely on outdated comparisons, miss a recent renovation or misjudge the energy performance.

So ask to see the valuation report and check the comparable sales it is based on. Have your home valued yourself as well. A local estate agent often knows the recent sales in your street better than a valuer who covers a whole region. A free valuation of your home gives you a first idea. If you want to challenge the municipality's report on substance, you need an on-site valuation.

If the difference is large, make a written counterproposal and attach your own valuation. The municipality can then have an additional valuation carried out.

Selling to the municipality or on the open market?

A sale to the municipality has clear advantages. You do not have to organise viewings or have an advert made. The buyer does not need a mortgage, so there is no risk of the sale falling through because a loan is refused. As with any sale, the buyer pays the costs of the deed.

There are also drawbacks. There is no competition, so the price stays tied to the valuation. Decision-making is slow, and a changed budget or a new council after elections can delay or halt a file.

In doubt? Put both options side by side. Ask a few estate agents what your home would fetch on the market and how long the sale would take. Through ImmoMakelaarVergelijker.be you can compare up to 3 local estate agents, free of charge and without obligation. With those figures you negotiate from a stronger position, including with the municipality.

Which documents and obligations still apply?

Even if the buyer is a public authority, you are still a seller with the usual obligations. In Flanders you need, among other things, an EPC, a soil certificate from OVAM and, for a building from before 2001, an asbestos certificate. On top of that come the inspection of the electrical installation and the planning information. In Brussels and Wallonia similar documents apply, with their own rules. Ask the municipality or the notary in good time which documents they expect.

If there is still a mortgage on the home, it is paid off from the sale price at the deed and the notary has the registration removed. If you rent out the home, the municipality as the new owner in principle takes over the current lease. Discuss in advance what the municipality plans to do with the tenant.

The same tax rules apply as for any sale. For your own home, a capital gain is usually not taxed, but for a second home or a building plot you have not owned for long, things can be different. You can read more in our article on capital gains tax when selling a home. Have your situation confirmed by your accountant or the FPS Finance before you sign.

Tips for a smooth file

• Get every commitment in writing. An email from the property department is not yet a decision of the municipal council, but it is a record of what was discussed.
• Ask about the timing: when will the file be on the agenda of the board and the municipal council, and has a budget been set aside?
• Negotiate other terms besides the price too: the date you leave, the moving costs, the condition in which you leave the home and what happens to the garden or outbuildings.
• Have the draft deed checked. If the municipality works with an administrative deed, you can ask a notary to review it at your own cost.

If you know the market value of your home, you are stronger in every conversation. Compare estate agents in your area and ask for a well-founded valuation before you respond to the municipality's offer.

Finally

Selling a home to the municipality is a voluntary sale with its own rules. The price is based on a valuation, the municipal council decides and the deed can be executed by a notary or as an administrative deed. Check the valuation report, have your home valued yourself and allow for slow decision-making. That way you sell with certainty, without giving up too much on price.