The Municipal taxes and WOZ news alert addresses interesting developments and court rulings concerning local taxes and the Valuation of Real Estate Act (WOZ). The news alert is published in principle every four months. Hereby we present you the April 2014-edition.
Table of Contents
Two important changes will take place in 2014:
- The tax rate on tap water has been increased and the maximum threshold will no longer apply.
As of January 1, 2014 the tax on tap water has been increased from EUR 0.165 to EUR 0.33 per cubic meter of tap water and as of July 1, 2014 the maximum threshold of 300 cubic meters of tap water will no longer apply and will be replaced by a degressive tax rate: the more water used, the lower the tax rate. Consumers of large amounts of water, such as the industrial sector and the food industry, will be hit hard by this measure.
- Waste tax has been reintroduced as of April 1, 2014.
Commencing 2012 this tax had been canceled as part of the simplification of the tax system and in order to reduce the administrative burden. However, as a result of cuts in government spending, this 'dumping tax' has been reintroduced. EUR 17 of tax must be paid for each tonne of dumped waste. The owner of the landfill is subject to tax, but often passes this tax on to the parties who dump the waste in the landfill. The government is currently looking at an alternative for 2015 onward, as taxing the dumping of waste has not led to the desired 'green effect' and the intention is to realize a higher tax revenue. We expect more clarity on this issue on Budget Day.
2. Case Law
- WOZ: higher WOZ valuation not possible
A taxpayer filed a notice of objection against his WOZ decision because he wanted a higher valuation; this in connection with taking out a mortgage or the sale of the dwelling. An important principle in administrative procedural law is that any legal remedy applied by a party must not prejudice their interests. The taxpayer argued that a higher WOZ valuation would not prejudice his interests in respect of the non-tax purposes he referred to. The District Court acknowledged this, but ruled that the favorable non-tax purposes (mortgage/sale) fall beyond the scope of the WOZ Act. One of the consequences of increasing the WOZ decision would be a higher municipal property tax assessment (onroerendezaakbelastingen; OZB) and this would be to the detriment of the taxpayer. Therefore, an increase in the WOZ valuation (decision) was not permitted.
- WOZ: beneficiary is entitled to a stakeholder decision
The parents of the interested party were married in community of property. At the mother's passing, the father received all the goods from her estate, including the family home. The interested party had a receivable on the father that corresponded to the value of his part of the inheritance. Inheritance tax is, in principle, payable on the amount of this receivable. The amount of the receivable is, in part, determined by the value of the family home: the WOZ value on January 1, 2010. The interested party requested the municipality to issue him a stakeholder decision, so that he could try to reduce the WOZ valuation in an objection procedure. The municipality, the District Court and the Court of Appeals all ruled against the interested party, because at issue was a receivable and the interested party was not the owner or part-owner of the home. However, the Supreme Court thought differently: as the amount of the receivable is, in part, determined on the basis of the WOZ valuation of the family home, the determination of the value does affect the interested party and the municipality must issue a stakeholder decision.
- OZB: premises occupied to counter illegal squatting must, in principle, be used as a residence
The interested party had concluded an agreement with the owner of a vacant disused laboratory, under which the interested party would live on the property in order to avoid it being used as an illegal squat. However, the interested party subsequently allowed caretakers to live on the premises. In dispute was whether the premises should be regarded as a non-residential or residential property within the meaning of the Municipalities Act. A user's OZB assessment is not imposed on a residential property and the property is subject to a lower owner’s tax rate. The Court of Appeals Den Bosch concluded that at issue is whether the premises are actually lived in, and the public interest and tolerating an anti-squatting policy are irrelevant for the designation of the real estate. According to the Court of Appeals, the property must be regarded as a residential property.
If you would like to receive more information about municipal taxes and the WOZ, please contact either your tax advisor at KPMG Meijburg & Co, or one of the contacts listed below, or click on the following link www.meijburg.nl.
+31(0)20 656 14 72
Annemiek van Dijk
+31(0)20 656 12 46
Edward de Ruig
+31(0)20 656 11 81