The District Court of Overijssel recently rendered a judgment in respect of a dispute between an owner of a floating solar park (the plaintiff) and the tax officer of the joint tax office Lococensus-Tricijn (gemeenschappelijk belastingkantoor Lococensus-Tricijn) (the defendant).
The question was whether the floating solar park should be regarded as immovable property for the purposes of the Valuation of Immovable Property Act (Wet Waardering onroerende zaken) (the Act). If the floating solar park qualifies as immovable property, value should be assigned to the solar park pursuant to section 17 of the Act, as a result of which property taxes are due. The plaintiff took the position that the floating solar park does not qualify as immovable property and that the value of the solar park, and therefore also the property taxes due, should be set at nil.
This judgment is not only relevant for the application of the Act, but also (among other things) for the financing sector whereby, for example, security rights over such a floating solar park are granted. If the floating solar park qualifies as immovable property, a mortgage must be granted (which is similar for registered ships and planes), while a pledge must be granted if the floating solar park qualifies as movable property.
Whether a floating solar park is immovable property for the purposes of the Act, must be established in accordance with Dutch civil law as laid down in the Civil Code (Burgerlijk Wetboek) (DCC).
In accordance with existing case law, property that, according to its construction, is intended to float and floats, must be regarded as a ship within the meaning of section 8:1 DCC. In addition, a ship is generally regarded a movable property. The court has established that the floating solar park is intended to float and floats, and that it therefore qualifies as a ship. The court disregards the statement of the defendant that it is also relevant whether the solar park is used as a means of traffic or transportation or to what extent the case is intended to remain on site for a longer period of time.
The court then examines the question whether the ship actually qualifies as movable property. Pursuant to section 3:3 DCC, a floating solar park qualifies as immovable property if the solar park is sustainably bound to the ground, either directly or through other buildings or works. According to the court, this is not the case with respect to the floating solar park. The fact that the floating solar park is connected to the ground by means of cables and folding anchors does not result in a different opinion. The court refers to the reasoning of the Supreme Court regarding houseboats, in which the houseboat in question was connected to mooring posts anchored in the ground by means of cables. As was the case with the houseboat, the floating solar park is able to move with the water level as a result of the way in which it is connected to the ground. In such a case, it cannot be said that the property is a sustainably bound to the ground. According to the court, there is also no sustainable connection with the shore. According to the court, in line with existing case law of the Supreme Court, it is not sufficient that the solar park (as was the case) is connected to the shore by means of an electricity cable.
The court therefore concludes that the floating solar park in this case is a ship within the meaning of section 8:1 Dutch Civil Code and no immovable property within the meaning of section 3:3 DCC.
The court concludes that no value needs to be assigned to the solar park pursuant to section 17 of the Act. This is of course important for the application of the Act. As stated, this judgment is also important for the financing sector, particularly for parties providing financing to owners of floating solar parks who wish to establish security rights over floating solar parks.
If you are a party dealing with floating solar parks or similar issues and you require legal and/or tax advice, please do not hesitate to contact the specialists at Meijburg Legal and/or Meijburg & Co.