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06 December 2019 / article

Private limited company with campsite / holiday park is not a real estate company

The Gelderland District Court has ruled that the acquisition of shares in two private limited companies whose assets consist mainly of immovable properties is not subject to real estate transfer tax, because all the immovable properties are being used for the operation of a recreation business.

Legal Document

The proceedings concern the acquisition of two private limited companies that operate a holiday park. The operation consists of the letting of pitches for chalets and mobile bungalows. The dispute is whether the private limited companies qualify as ‘real estate companies’, which would result in the levying of real estate transfer tax. The dispute relates exclusively to the purpose condition, i.e. that the real estate must be used for 70% or more to acquire, dispose of or operate that real estate. The tax inspector believes that the purpose condition has been met, because the only activity is the basic letting of annual pitches.

Question of law

The question is whether or not the purpose condition is met.

Assessment by the District Court

The Gelderland District Court ruled that the purpose condition has not been met, because the companies operate a recreation business and the properties are being used for this purpose. The Court took into account that the operation requires more labour than in the case of basic letting of annual pitches alone, because the companies arrange for the peace, order and tidiness within the parks sought by the visitors. The fact that the facilities on offer are very modest compared to many other recreation businesses does not lead to a different assessment. Therefore, no real estate transfer tax is due on the acquisition.

Practical implications

It is clear from this judgment that providing the opportunity for recreation by making annual pitches available does not necessarily result in a real estate company, because the purpose condition is strictly interpreted. In the present case, the companies only took care of the construction and maintenance of infrastructural facilities, the maintenance of peace and order, the management of green spaces and the collection of waste.

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