Separation of real estate sale from business operations and RET subject
In case SKA – 25/2014 the Supreme Court assessed the issue of separation of real estate sale from business operations.
The applicant (a natural person) had disposed of 11 immovable properties within two years, had owned all the properties for more than 12 months but did not use them for personal needs (residence). The SRS considered that by selling these properties the person was in business.
The court acknowledged that it is not important for what use the property is bought unless it is directly provided as a sales object, that is, for resale. The fact that a person uses the property for doing other business or transfers it to other parties for use does not mean that for this reason the sale becomes a business. Compliance of the person's activities with the character of a business should be assessed. Likewise the number of properties sold alone cannot be decisive to detect business operations, which should be assessed jointly with other circumstances.
In another case (SKA – 276/14) about applying real estate tax discount in a matter involving legal possession the Supreme Court determined that a person who has not registered title to an apartment with the land registry (only registering the transaction in the cadastral register of the State Land Service) should be considered to be the legal possessor of the apartment but not the owner. With regard to tax allowances, use of analogy is not allowed in this situation by comparing the legal possessor with the owner because allowances apply in exceptional cases and cannot be used extensively.
Restoration of a building in divided property and in a protected zone
In case SKA – 164/2014 the Supreme Court reviewed a situation of necessity to obtain the land owner's approval to restore buildings in divided property. The Supreme Court concluded that “in the case of divided property, the land owner has no right to prohibit the owner of construction to restore an auxiliary building that has previously been in the composition of the construction”.
Thus unlike the situation when someone wants to construct a new building, in this case no coordination from the land owner is required, nor would their objections be taken into account. Because the buildings were already existing, the legal situation in essence had not changed and no new consent was required.
However, the Constitutional Court has presently initiated case No 2014-16-01 regarding options to restore destroyed buildings in the protected dune area along the shore of the Gulf of Riga. In administrative case law, an opinion has been established that a permit to restore a building can be issued only when the building is partially destroyed but if the building is burnt down to its foundations in a fire, a restoration permit is not issued. The application indicates that this situation causes inequality and disproportionately limits a person's rights to property (21 October 2014 is set as the term for case preparation).