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Written by:
Bas Hollenberg


Tax relief for listed buildings abroad

The Netherlands Income Tax Act 2001 contains an allowance scheme for expenses incurred in connection with repair and/or maintenance work involving listed buildings. A property is required to be included in one of the registers as per the Netherlands Monuments and Historic Buildings Act 1988 in order for its owner to qualify for this kind of tax relief. The tax allowance option is available for owner-occupied and “Box 3” properties alike. Although it is not expressly stipulated in the Monuments and Historic Buildings Act that the property in question should be situated within Dutch territory, the legislative system as such does imply that this should be regarded as a condition.

The European Court of Justice in a recent ruling decided that the above condition was not ad odds with European regulations. The Court had been asked to adjudicate a case brought by a Dutch subject who lived in a castle in Belgium that had been designated as a building of outstanding historic and/or architectural interest domestically. The owner of the castle earned his income in the Netherlands and for this reason had opted in favour of being treated as domestic tax payer in the Netherlands. The Dutch Tax and Customs Administration argued that given that the castle was not entered in any of the Dutch registers as per the Monuments and Historic Buildings Act, its owner lacked entitlement to tax relief where it concerned repair and maintenance costs. The Breda District Court dismissed the notion that entitlement to tax relief should be confinable to Dutch-based listed buildings, in a decision which was subsequently upheld by the Bois-le-Duc Court of Appeal. The Supreme Court of the Netherlands then asked the European Court of Justice to issue a preliminary ruling in the matter. Although according to the latter Court the Dutch scheme did restrict the freedom of establishment, it did not discriminate against non-residents compared with residents, which two categories were after all not in a similar position. The statutory scheme had been set up for the purpose of preserving and protecting the cultural heritage of the Netherlands, as an option which was similarly available to any tax payer who owned a Dutch-located listed building while being a resident of a Member State other than the Netherlands.

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