Converted post office qualifies as newly constructed property
The Zeeland-West-Brabant District Court has come to this conclusion because the structure, the architectural identity, the size and the function of the former post office have changed and the investment amount is considerable. Since, according to the District Court, it concerns 'a newly constructed property' for VAT purposes, the concurrence exemption from real estate transfer tax applies to the acquisition of the former post office.
The buyer of a former post office took the view that he could apply the concurrence exemption from real estate transfer tax. The post office had been converted by the vendor into a multifunctional building with retail space, office space and catering facilities. A new entrance for the offices and three new entrances were also made. During the conversion, the interior walls, large parts of the foundations and side walls were removed and the ground floor was extended. A new reinforced floor with a foundation was installed for the purpose of the conversion. A parking deck with 67 parking spaces has been built on top of the new building. In spite of these activities, the appearance of the building remained intact.
Question of law and importance
The dispute is whether the buyer is liable for real estate transfer tax with regard to the acquisition of the former post office. The question is whether it concerns the acquisition of a newly constructed property for VAT purposes, as a result of which the concurrence exemption from real estate transfer tax applies.
Assessment by the District Court
According to established case law of the Supreme Court, a new property is built for VAT purposes if it concerns 'essentially newly build real estate'. For the reasons mentioned above, the Zeeland-West-Brabant District Court ruled that the post office is in essence a new building. The fact that the appearance of the post office has been retained does not change this.
This means that the concurrence exemption applies.
In our opinion, this case is clearly a case of a newly build real estate for VAT purposes, because the structure and size of the building have changed significantly. The judgment of the District Court shows that the fact that the image/appearance of the building only changes to a limited extent does not stand in the way of such a qualification. However, whether a property qualifies as newly build real estate remains highly dependent on the facts and circumstances of the case and the weight given to them.