The Dutch District Court of Gelderland recently made a decision in a case where a property was supplied, whereby was agreed that the buyer would demolish the property. The question was if the property could be regarded a ‘building plot’ at the time of the supply.
The property consisted of a farm and appurtenances, supplied on 21 September 2021. The supply was based on a purchase agreement, which included a chain clause under which the buyer is obliged to realise building land by 1 June 2023 at the latest, by demolishing the buildings designated by the parties themselves. The demolition obligation applies to the appurtenances and not to the farm.
The dispute concerns whether the property can be regarded as building land upon delivery and should therefore be exempt from transfer tax (and subject to VAT).
The Gelderland District Court follows the Inspector’s position that only in the event that the seller carries out the demolition of the building in connection with the sale of it, there is a supply of undeveloped land for VAT purposes (cf. ECJ 19 November 2009, C-461/08 (Don Bosco) and ECJ 4 September 2019, C-71/18 (KPC Herning)).
In this case, it was the express intention of the seller to supply a built-up plot of land to X. After all, the seller stipulated that the buyer must carry out the demolition work and included this obligation in the chain clause. It cannot be said that a building plot was supplied to X by the seller. In view of this, it has also not been made plausible that this delivery is subject to VAT.
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