Real estate ownershipi Planning
An owner's rights to the use of immovable property are regulated by the Spatial Planning Act and the Environmental Permitting (General Provisions) Act. The zoning plan is a central element in the Spatial Planning Act. This plan is drafted by the municipal authorities and designates the purpose for the land (housing, offices, retail, agricultural use, public space, etc.). In addition, the zoning plan sets out the rules regarding the use of the land and the immovable property situated on it. Permits concerning the construction of immovable property can be issued if the intended use is in keeping with the zoning plan. An exemption is the permit for 'spatial planning for contrary use', which provides flexibility to municipalities. Enforcement measures are available in the event of failure to comply with the prescribed use of the zoning plan or the permit for spatial planning for contrary use.
Should a landowner desire to construct immovable property, convert existing immovable property or carry out activities harmful to the environment, a permit is required. On the grounds of the Environmental Permitting (General Provisions) Act, a single permit can be requested that is sufficient for all activities of the landowner's project. This is known as the single environmental permit. A large number of permits, exemptions and notifications (around 25) are integrated into this single environmental permit.ii Environment
Liability for soil pollution is regulated under the Soil Protection Act. This is based on the polluter pays principle. When it is not or is no longer possible to identify the polluter, the owner is in principle held liable. The owner may also be held liable if the pollution spreads or if others suffer damage as a consequence of exposure to it. The government can force polluters or owners to clean up by ordering them to do so. If this is not possible, the government itself takes on the responsibility for remediation. In summary, the general order of liability is polluter, owner then government.
The strict liability of the owner or leaseholder of a business park reaches further than the strict liability with regard to other properties. The owner or leaseholder of a business park is obliged to clean up after the occurrence of serious soil pollution for which a need of remediation has been established, regardless of whether the pollution was caused by the owner or the leaseholder. The obligation to remediate the soil lies with the owner or leaseholder of the business park in which the source of the pollution is located. For business parks, the polluter pays principle also applies.iii Tax
Pursuant to the Real Estate Transfer Tax Act, real estate transfer tax (RETT) is in principle levied upon the acquisition of immovable property located in the Netherlands. The same applies to rights to which immovable property is subject, such as leasehold or building rights. The term 'acquisition' includes the acquisition of beneficial ownership. The rate for residential properties is 2 per cent and the rate for other immovable properties is 6 per cent.
The acquisition of shares in a company holding Dutch real estate could also be subject to RETT if each of the following conditions are satisfied (cumulatively):
- the purchaser, together with related entities, acquires or increases a one-third or more interest in the company;
- upon the acquisition or at any time during the preceding year, the assets of the target comprise, determined on the basis of the fair market value (1) for more than 50 per cent foreign or Dutch real estate and (2) for 30 per cent or more Dutch real estate including shares in Dutch real estate companies; and
- the real estate companies are fully or primarily (70 per cent or more) used for real estate trading or exploitation activities.
If applicable, the RETT will be levied on the higher of (1) the value of the real estate assets (i.e., without deducting any debts whatsoever) and (2) the purchase price.
The Real Estate Transfer Tax Act contains several exemptions concerning, inter alia, an acquisition resulting from merger and divestment, transfers between group companies and the acquisition of networks. Furthermore, an exemption from RETT applies to the acquisition of newly constructed immovable property or building land in respect of which VAT is due.
The delivery of possession of immovable property is in principle exempt from VAT, unless it concerns the delivery of possession of new immovable property taking place before or within two years after the date of first occupation; or the delivery of possession of building land. In principle, these forms of delivery of possession have a 21 per cent VAT imposed on them.iv Finance and security
Immovable property may be encumbered with a mortgage. A mortgage is a limited security interest intended to provide recourse against the immovable property for a claim for payment of a sum of money, with preference over other lenders. The financing of immovable property with a mortgage as security interest for the financier is customary with regard to the immovable property of both private individuals and businesses. A mortgage right is created by a notarial deed recorded in the public registers.
A mortgage right has three important characteristics. First, it is an absolute right that may be invoked against any other party. Should a mortgagor dispose of any immovable property, the mortgage right on the immovable property remains. Because the mortgage right is evident from the public registers, there is no room for protection for a third party. Second, the mortgagee has the right to summary execution. If the mortgagor defaults in the settlement of that for which the mortgage serves as guarantee, the mortgagee is entitled to sell the immovable property. Third, should the mortgagor go into liquidation, the mortgagee is a secured creditor. The mortgagee can exercise its right as though there were no liquidation.
The procedure regarding the foreclosure by the mortgagee contains safeguards to prevent abuse of the right to summary execution and to maximise the proceeds in the interest of the mortgagor and any other lenders. In principle, the foreclosure must take place in the form of a public auction in the presence of a civil law notary. At the request of the mortgagee or the mortgagor and with court approval, a private sale under execution may also be held. As of 1 January 2015, sale under execution of immovable property is possible via the internet. This makes the sale under execution accessible to the wider public and aims to generate higher execution proceeds.
The mortgage right depends on the claim that the mortgage serves to guarantee. Should this claim be transferred, the acquirer also acquires the security interest pertaining to it. Another consequence of the mortgage right's dependent character is that the right is extinguished once the claim is settled. Bank mortgages are an exception to this rule. A bank mortgage involves the granting of security on all claims that the mortgagee has in respect of the mortgagor either now or at any time and for whatever reason. Therefore, it may even be created prior to the mortgagee having a claim against the mortgagor.
As well as being created on the debts of the mortgagor, a mortgage may also be created on the debts of third parties. Such cases are referred to as third-party mortgages; the owner and not the borrower is then the mortgagor. Group company financing often involves third-party mortgages. A bank extends a credit facility to the parent company, on the basis of which a mortgage on the immovable property of the operating companies is provided as security.
Normally the mortgagee is also the financier. If a banking syndicate performs as financier, it is not practical that all the banks become mortgagees considering the foreclosure process. By means of a parallel debt structure, an agent may be appointed as mortgagee, who the parties agree has an equal claim to those of the combined banks. Such a structure is not contrary to the dependent character of the mortgage right.