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06 December 2019 / article

No 2% real estate transfer tax rate if pipes are missing

The Den Bosch Court of Appeal has ruled that a property does not qualify as a dwelling for the purposes of real estate transfer tax if, at the time of acquisition, the pipes for the kitchen and sanitary facilities are still missing.

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The buyer of an apartment right in a building that had been used as a monastery for years had paid 6% real estate transfer tax. At the time of delivery, internal walls still had to be installed and the pipes for the kitchen and sanitary facilities still had to be extended to the place where they were required.

Question of law

The dispute is whether the 2% rate for dwellings was applicable or not.

Assessment by the Court of Appeal

The immovable property in question was not originally designed and built as a dwelling. At the time of acquisition, partitions and a private front door were installed to separate the apartment from the rest of the block. Also, a new meter cupboard was installed and the connections for the utilities were extended into the apartment. According to the Den Bosch Court of Appeal, these activities are insufficient to classify the independent property as a dwelling by its nature at the time of acquisition. In this respect, it was considered that the property did not yet have all the structural characteristics of a dwelling, due in particular to the lack of pipes for the kitchen and sanitary facilities at the time of the transfer of title.

Practical implications

In a previous case, the Den Bosch Court of Appeal also ruled that the 6% rate was applicable because there were no pipes for the kitchen and sanitary facilities. It was a ballet hall 'in transformation' in the same monastery as in the present case. In this casethe buyer also carried out work after delivery to complete the conversion into a dwelling. These judgments show that the exact facts and circumstances at the time of transfer determine whether the 2% rate applies. It may therefore be worthwhile to postpone the transfer of ownership until the transformation work has progressed so far that it does constitute a dwelling.



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