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24 June 2019 / news

Additional assessment for real estate transfer tax for sale of portfolio under time pressure

According to the District Court the taxable base for real estate transfer tax purposes must be calculated for each property, and not at portfolio level.

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The facts

There are multiple related legal actions taking place about the acquisition of part of a property portfolio by different group companies of the same group. We will discuss the acquisition by one of the buyers of a specific part of a property portfolio. A purchase price of EUR 250 million was attributed to the property which this buyer acquired. The State Valuer valued this property at EUR 325 million, whilst a third valuer put forward a value of EUR 363 million. The buyer resold part of the property on the acquisition date, whereby a slightly higher price was achieved on the onward sale. The inspector imposed an additional assessment for real estate transfer tax based on a taxable base of EUR 302 million.

Issue of law and interest

In dispute is the taxable base for which real estate transfer tax is due by the buyer. According to Noord-Holland District Court, it is not disputed that the price was agreed between independent parties who as such were acting in a at arm’s length manner. Nonetheless, the market value of a property might be higher than the agreed purchase price, for example because (i) a quantity discount applies when purchasing a portfolio, (ii) it involves a restructuring or (iii) a seller wants to carry out a transaction on short notice. According to the District Court, the taxable base for real estate transfer tax purposes must be calculated for each property, and not at portfolio level.


The District Court decided that the inspector has established a prima facie case, with the valuations for the individual properties, that time pressure led to a non-marginal discount on the purchase price. The District Court does not agree with the buyer’s argument that the third valuer’s valuations are too high because these were made for financing purposes. The District Court also does not to accept the buyer’s argument that the Tax Administration should have granted a reduction for the property acquired by group companies and which were valued by the State Valuer at less than the allocated purchase price. According to the District Court, in the event of a portfolio purchase, it is up to the buyer to allocate the purchase price in such a way that real estate transfer tax is levied on the correct amount.

Practical interest

This case shows the importance of a well-substantiated purchase price allocation when purchasing multiple properties, e.g. on the basis of valuations of the individual properties. Apart from this, we struggle to accept the view of the District Court and the Tax Administration. Even if the value must be calculated per property, there must still be scope to ensure that the most suitable and optimal form of sale is partly dependent on reasonable commercial preconditions on the part of the owner. Selling off in individual units should not become the norm. Particularly since it is the buyer who is confronted with the cost of the additional real estate transfer tax and he cannot influence the decisions that a seller makes about the form of sale.


If you have any further questions on this issue or would like to receive more information, please contact Jérôme Germann, Jérôme Ariës or your trusted adviser at the Loyens & Loeff Real Estate Tax Team.

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