Additional ammunition to challenge second home tax

In twelve different rulings, owners who challenged the second home tax in Nieuwpoort were proved right. The court ruled that the tax violates the principle of equality and is therefore null and void. What are the consequences?

The tax on second homes on the coast has been under fire for years now. Last month, the Court of First Instance of Bruges rendered twelve rulings in disputes against the city of Nieuwpoort.

In each case, the owners were found to be right and are reimbursed the disputed tax.

‘The court ruled that the tax regulations of Nieuwpoort violates the constitutional principle of equality’, says Evert Moonen of De Langhe Attorneys. ‘Surprisingly, the court does not do this on the basis of the different rates Nieuwpoort applies, depending on the location and surface area of the second home. The rulings are given because of the exemption for owners who have lived in this community for at least 20 years and are now staying in a rest home without selling or renting out their former home. The court ruled that the distinction according to the circumstances as a result of which a residence becomes a second home is not reasonable and no proper justification is given in the tax regulations for this issue.’

The taxpayers concerned had submitted a notice of objection to the city council to the tax for the 2016 tax year, but the city council declared the objection unfounded. They then went to court.’ The ruling is primarily relevant to the taxpayers concerned.

They get the tax refunded’, says Frank De Langhe of the law firm of the same name.

Depending on the location and surface area, the amount for the 2016 tax year lies between 551 euros and 954 euros. Rates increase annually: for the current tax year, the owners of a second home in Nieuwpoort will have to spend between 574 euros and 990 euros.

‘On the basis of these rulings, other taxpayers are no longer able to recover the tax for the 2016 tax year. To this end, they had to submit a notice of objection in good time,’ De Langhe says. You may only submit an appeal to the town council with a notice of objection within three months of the date on which the tax assessment notice was sent.

Precedent

‘The rulings are an important precedent for similar tax regulations in other cities. For example Knokke-Heist, Gent and De Haan have included an exemption in their tax regulations. The rulings offer perspectives for people who own a second home in these areas’, says De Langhe.

‘However, such procedures may not be appropriate for every city or community. First of all, the communal tax regulations must be analysed’, De Langhe explains. There can only be a breach of the principle of equality if there is no reasonable and objective justification for such discrimination.

‘One city council may provide better justification for the distinction made than another. In Nieuwpoort, Oostende, Middelkerke, De Haan, Knokke-Heist and Koksijde the argumentation is more limited, which means that a taxpayer has a better chance of winning their case’, says Moonen.

In Nieuwpoort, the exemption for rest home residents is the main stumbling block. Other arguments could however be put forward. Last summer, the court ruled that the different tax rates depending on the location in De Haan contravene the principle of equality. The second home tax amounts to 650 euros in the zone closest to the coastline; 500 euros in a second zone and, finally, 420 euros for the part that is furthest away. ‘The tax regulation of De Haan still hasn’t been adjusted, says Moonen.

One of the reasons is unequal treatment of permanent residents and owners of second residences in some coastal communities. ‘Permanent residents contribute less to communal finances than the owners of a second home, whereas the latter do not permanently reside in the community and should pay less’, Moonen explains. In Knokke-Heist, Koksijde and De Panne the permanent residents do not pay any communal surcharges on personal income tax.

‘Differences in rates depending on the surface area of the property may also be called into question’, Moonen continues. In addition to Nieuwpoort, Koksijde, De Panne and Middelkerke also have a differentiation according to the surface area of the property.

 

Newspaper article De Tijd  second home tax Nieuwpoort

Online article De Tijd 2 February 2018

Published in De Tijd, 3 February 2018