This was the conclusion reached by the Gelderland District Court in a number of judgements handed down in August and September 2015, against which an appeal (by way of leapfrog) has since been lodged. The Association of Netherlands Municipalities (VNG) advises local authorities to apply the ruling of the Gelderland District Court. If local authorities do so, this will mean the following for the levying of property tax (OZB):
– application of the higher property tax rate for non-residential properties;
– that property tax must also be paid by the occupier of the holiday home (in the case of residential properties, only the owner is liable for property tax).
The case heard by the Gelderland District Court concerned holiday homes in a bungalow park where it had been established that permanent residence was not permitted under the applicable local authority regulations. According to the court, a property is only considered a dwelling if it is used primarily as a dwelling, in that it is intended for permanent occupation by the actual occupier.
In view of the grounds given by the court for its judgment, we do not rule out the possibility that the Supreme Court may take a different view on the matter. It is therefore advisable, in order to safeguard one’s rights, to lodge an objection against property tax assessments in which a local authority taxes a holiday home as a non-residential property. Such a pro forma An appeal must be lodged within 6 weeks of the date of the property tax assessment. The grounds for such an appeal may be limited to a reference to the proceedings pending before the Supreme Court. The local authority will then hold the appeal in abeyance until the Supreme Court has reached a decision.
In September, the Zeeland-West-Brabant District Court ruled that holiday homes situated within a holiday park do indeed qualify as dwellings. In this case, however, it was agreed between the parties that the holiday park should be regarded as a single property. As less than 70% of the total value of the holiday park qualified as residential property, the holiday park was nevertheless classified as non-residential. This meant that the local authority was entitled to charge the operator of the holiday park the user levy and the non-residential rate. However, the value of those parts of the immovable property (the holiday park) which are primarily used as dwellings or primarily serve residential purposes had to be excluded from the property tax assessment base.
In addition to the implications for property tax outlined above, the courts’ rulings may also have implications for stamp duty. After all, the reduced rate of 2% (the standard rate is 6%) applies only to residential properties.
In addition, when valuing the property for income tax purposes (Box 3), it is important to determine whether it constitutes a residential property.