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06 December 2019 / article

Exemption of real estate transfer tax for each independent part of a floor

According to the Arnhem-Leeuwarden Court of Appeal, each of the floors consists of at least two separately usable parts, as a result of which the interested party is entitled to a refund of the real estate transfer tax.

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The interested party acquired an office building and at the time of acquisition parts of the third and fifth floors had been in use for less than two years. On the basis of the then applicable extended period of 24 months for the so-called property developers ruling (which applied from 1 November 2012 to 31 December 2014), the interested party considered that it was entitled to the concurrence exemption from real estate transfer tax.

Question of law

After prolonged proceedings up to the Supreme Court, the dispute as to whether the third and fifth floors for the whole had been in use for more than two years or whether the exemption could be applied to parts of these floors is still pending before the Court of Appeal.

Assessment by the Court of Appeal

Following an on-site observation, the Arnhem-Leeuwarden Court of Appeal found that the two floors consisted of at least two separate parts that could be used separately. All facilities and provisions for separate use are available. Tenant dividing walls were present and each part was equipped with all installations such as separate water and electricity meters. The parts that do not exceed the two-year period are therefore eligible for the concurrence exemption. The interested party is entitled to a refund of real estate transfer tax.

Practical implications

In the judgment of the Arnhem-Leeuwarden Court of Appeal, it was only important whether separate, independently usable parts were present on each floor. This is a very factual assessment.



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