Action Municipal Tax
Since October 2020, TWERES has been running an online counter for owners of second homes in De Panne, Knokke-Heist and Koksijde who wish to contest the municipal tax on second homes.
Since October 2020, TWERES has been running an online counter for owners of second homes in De Panne, Knokke-Heist and Koksijde who wish to contest the municipal tax on second homes.
The initiative of TWERES is directed against the tax on second homes or tourist accommodation in municipalities where no additional personal income tax is levied at the expense of the registered residents. In these municipalities, owners of second homes are taxed heavily in a discriminatory manner. Judgments of the Court of Appeal in Ghent (concerning Koksijde), condemning this practice, stood up before the Court of Cassation. A judgment of the Court of Appeal in Ghent of 24 December 2019 (concerning De Panne) was not further contested by the municipality.
TWERES realises that the tax on second residences in other coastal municipalities – e.g. Ostend, Blankenberge or Nieuwpoort – is also very high. For all sorts of reasons of a purely legal nature that mainly have to do with the way in which these municipalities justify the tax on second residences, the chances of success of legal actions in the coastal municipalities mentioned are much lower. That is why the initiative of TWERES is limited for the time being to De Panne, Knokke-Heist, and Koksijde.
In De Panne, Koksijde and Knokke-Heist the registered residents do not pay any additional personal tax. This is very unusual. It suffices to look at the supplementary municipal tax rates published by the FPS Finance: https://financien.belgium.be/sites/default/files/downloads/111-tarieven-gemeentebelasting-2020.pdf. The zero rate in the four coastal municipalities also directly contradicts the recommendation of the Flemish Government,which writes: “In order not to shift the tax burden to people who are not registered in the population registers of the municipality and who are therefore not eligible to vote there, the rate levied must be reasonably proportionate to the taxes paid by the inhabitants (first and foremost the supplementary personal tax and the surcharges on real estate taxes)”.
Only in coastal municipalities, some municipalities around Antwerp (Aartselaar, Beveren, Kapellen, Schilde, Wommelgem, Zwijndrecht), Schaarbeek and Zaventem these rates are around – or exceptionally even below – 5% of the taxable family income. In most Belgian municipalities a family pays around 7% on average. In many Belgian municipalities the rate is between 8% and 9% of taxable income. A rate of 0% is thus highly exceptional and is only possible in the municipalities concerned by levying very high taxes on second homes.
In Koksijde, since 2020, a “general municipal tax” is levied for those who have their main residence in the municipality. For the assessment year 2021, this tax amounted to 171 euros for a family (151 euros for a single person). On the other hand, the environmental tax in Koksijde has been abolished as of 2020. The tax on second homes already amounted to 1,191 euros in 2021 (987 euros for a studio).
In spite of the court rulings establishing the illegality of the tax, the municipalities concerned are still sending out assessment notices to owners of second homes on their territory. There is a simple explanation for this:
Given the precedents in case law, the chances of successfully contesting the tax on second residences in the four coastal municipalities mentioned are quite high today.
However, the owner himself has to take the necessary steps in time:
As explained below, both of these steps can be carried out via the TWERES online service point. Please read further in this text for further instructions.
If the appeal to the Municipal Executive is submitted by the owner, it will cost him/her no more than a postage stamp, apart from some time. If he/she wants a certain proof of the sending of his/her objection, it is better to send it by registered post.
There are costs associated with the proceedings at the court:
If the court declares the tax unlawful, the municipality is ordered to pay the legal costs (in addition to reimbursement of the tax). Legal costs include a flat-rate contribution to the taxpayer’s legal costs (the procedural cost). Thus, the taxpayer always recovers (at least part of) the costs.
The amount of the litigation costs depends on the value of the dispute (the tax rate). The judge can also increase or decrease the amount due to specific circumstances. For example: for a dispute about a tax of 1,000 euros, the basic amount of the litigation costs per instance is currently 600 euros (but the judge can adjust this to a minimum of 300 euros or a maximum of 1,200 euros). More details can be read here.
TWERES offers owners of second homes in De Panne, Knokke-Heist and Koksijde to take charge of the entire procedure for a fixed – all-in – amount of 400.75 euros (incl. VAT).
This amount covers, in addition to a contribution of EUR 20 as administrative costs for the intervention of TWERES, the entire procedure, from the submission of the notice of objection to the municipality up to and including the judicial decision on appeal.
To this end, the association works together with a reputable lawyer in tax matters, Pieter Dewaele of the Kortrijk law firm DSD Advocaten. Mr Dewaele was already the lawyer for the second residents in the procedure that led to the very positive judgment of the Court of Appeal of Ghent of 24 December 2019. In that judgment, the tax on second residences in De Panne was found to be contrary to the principle of equality.
In the event of success, the owner participating in this action will receive the following:
For a deposit of 400.75 euros, the contribution to become a member of TWERES (10 euros) and some patience (since a procedure can take 3 to 5 years) a participant in this action recovers almost the entire amount invested and – above all – does not have to pay the municipal tax that, for example in Koksijde, can amount to 1,200 euros or more.
You can only become a member of the VZW TWERES by registering via this website (click on “Become a member”) and by paying the membership fee electronically. You will then receive confirmation of the payment via our service provider “Mollie”.
Your membership will be renewed annually unless you deactivate this renewal yourself via “Account data” (click on “Subscriptions”).
To access your account data, you need your user name (usually “first name.last name”) and the password sent to you upon registration. You can change your password yourself or create a new one if you have forgotten it (click on https://tweres.be/mijn-account/lost-password/).
We ask you to wait until you receive the assessment notice from the municipality inviting you to pay the tax on your second residence. Once you have received the assessment notice, you can proceed as explained in point 7.
It goes without saying that we need a copy of the assessment notice. On the basis of the information mentioned on the assessment notice, the lawyer will draw up your notice of objection. A copy of the first page(s) of the title deed is required in order to prove, especially in court proceedings, that you are indeed the owner of the second residence in question.
If you do not have a document scanner (whether or not integrated in your printer), you can use a mobile scanning application that you can install on your smartphone (e.g. PDF scanner on an Android device). If that doesn’t work either, you can take a simple photo of the requested documents. In that case, however, please check the legibility!
Please note that many newspaper vendors offer the scanning of paper documents as a service.
The easiest way for us is to receive the requested documents via our website, together with the completed participation form. This keeps everything together and avoids mistakes. If there is no other option, you can also send us the documents by e-mail to our address email@example.com.
The submission of an objection does not in itself have a suspensive effect. On the other hand, the municipality can only issue a payment order to recover the tax if there is an undisputed and due debt. By filing the notice of objection, the assessment is disputed as far as the second residence is concerned and therefore no (judicial) collection can take place.
Decision: There is no obligation to pay the disputed tax on the second stay pending a final decision on your objection.
In case of a final decision against you, late payment interest can be charged from the date of the payment reminder. However, interest is only due if it amounts to at least 5 euros per month (which assumes a tax debt of 1,500 euros), which is not the case here.
The starting point is that in case of non-payment, default interest will indeed be charged.
On the other hand, in the event of an exemption, the municipality must also pay moratorium interest on the non-due tax.
Therefore, until now, our lawyer agreed with the municipality that owners who filed an admissible objection/appeal did not have to pay the tax as long as the procedure was ongoing, without incurring interest.
In the notice of objection that the lawyer submits for you, there is a statement that he assumes, without further notice, that the collection is suspended.
If you really want to be sure:
The fact that you have already paid the tax on your second residence does not prevent you from lodging an objection against this tax. Therefore, even if you have already paid the tax, you can still start the objection procedure via TWERES.
Attention! Some municipalities combine different taxes in one and the same assessment notice. This is typically the case in De Panne, where the same assessment form requests both the tax on second homes and the environmental tax (90 euros). So check your assessment notice to see if this is the case. The TWERES procedure only concerns the tax on second stays. The environmental tax (90 euros in De Panne) must therefore be paid anyway.
The answer is yes. The objection against the assessment is made by the taxpayer. If you are a usufructuary of a second residence and you are the one to whom the municipality addresses itself for the payment of the tax, you can therefore start the objection procedure via TWERES (e.g. in the case of a surviving spouse when the children have acquired the property of the second residence via inheritance or will).
The answer is no. In the case of more than one owner – co-owner – of a second residence, the tax on this second residence (even if the municipality claims part of the tax from each co-owner) is contested in the same procedure. These co-owners will therefore only have to pay the fixed amount of 400.75 to TWERES once.
It does not matter. If the second residence is owned by a company, the assessment notice from the municipality will be addressed to this company and it is the company that can lodge an objection against this assessment via TWERES.
If someone is the owner of several second homes in the same municipality (for example three flats, whether or not in the same building), the tax for all these homes can be contested in a single procedure via TWERES. The owner will then only have to pay the fixed amount of EUR 400.75 to TWERES once. The lawyer will contest the tax for all the second residences in a single appeal.
Bredene, Nieuwpoort or Ostend? TWERES is aware that the municipal tax on second homes is also very high in other coastal municipalities, such as Blankenberge, Bredene, Nieuwpoort or Ostend. In the last-named municipality, for example, the tax amounts to 1,000 euros per year. However, registered residents in Ostend also pay 6.50% of the taxable family income as additional personal tax. In Nieuwpoort, the additional personal tax amounts to 5% and the municipality levies a fixed tax of 975 euro on second residences with a surface area larger than 40 m2 (890 euro if smaller and 575 euro for mobile homes). The situation in these municipalities is therefore different than in the four coastal municipalities (De Panne, Knokke-Heist, Koksijde and Middelkerke) because the registered residents themselves pay additional personal tax to supplement the municipal coffers. Moreover, the way in which the municipality motivates the tax on second residences, in the case of Nieuwpoort, Oostende or Blankenberge, leaves much less legal room to contest the tax through the courts. Because of the “separation of powers”, a judge is not competent to judge the appropriateness of a tax. The court can only marginally check whether or not the law has been complied with.
The provincial tax on second homes in West-Flanders amounts, for the assessment year 2021, to 128 euros and is due by the owner of “a housing facility within the province, where nobody is domiciled”. Anyone who has his or her main residence in the province pays a general provincial tax, which is set at EUR 23 for families consisting of one person and at EUR 42 for families consisting of two or more persons.
Both taxes are motivated by their financing purpose. From the nature of the provincial tax on second homes, it can be deduced that it compensates for the loss of tax revenue caused by residential properties where no one is domiciled (and where, therefore, no general tax can be levied, but whose users can make use of the provincial services and infrastructure).
Conceptually, the tax on second homes (and the difference in treatment) thus seems defensible. After all, objectively speaking it concerns two different categories of owners, whereby one already indirectly contributes to provincial finances by virtue of his ‘residential facility’ (because general provincial tax is paid by the person who is domiciled in his residential facility) and the other does not.
However, the difference in rates is considerable: the owner of a second residence pays three times as much as a family domiciled in the province, while at first sight it cannot be assumed that he generates three times as many costs as that family.
Nevertheless, in view of the separation of powers, we believe that a judge will not declare the provincial tax on second residences illegal on the grounds of the difference in rates. The chances of success of a procedure therefore seem rather limited. In addition, few owners will be willing to pay a procedure costing several times more to contest a tax of 128 euros.
No. The objection procedure is limited to the assessment against which the objection is directed and can therefore only lead to the tax for that assessment year not being paid. Therefore, if you start an objection procedure via TWERES against the municipal tax on the second residency of the year 2021, you will only recover (or not pay) the tax for that year.
The notice of assessment that you receive from the municipality states “date of posting” at the top. Look at this date to check that the period of three months from the receipt of the assessment notice has not expired in your case.
Even if you have already submitted an objection to the municipality, you can still continue the procedure via TWERES. You should then upload the notice of objection that you have sent yourself, together with the other documents, according to the instructions under point 7 or send it to us by e-mail (firstname.lastname@example.org).
The municipality of Koksijde makes a distinction between “tax on second homes” and “tax on tourist homes”. A “second residence” is a private dwelling that does not serve as the main residence of the owner, the tenant or the user, but which can be used for living at any time. A “tourist residence” is a residence located in a residential recreation area (and which therefore cannot be used for permanent residence). For the assessment year 2021, the tax on tourist residences in Koksijde amounts to a fixed amount of 1,019 euros (594 euros for a mobile home in a residential recreation zone and 408 euros for a mobile home on a campsite).
Via TWERES you can also start an objection procedure against the municipal tax on tourist residences. The chances of success are probably as high as for the tax on second homes. The Court of Appeal of Ghent has also judged the tax on tourist residences in Koksijde as being contrary to the principle of equality.
No: the action continues in the following years. Owners of second homes who received their assessment notice more than three months ago and cannot in any case participate in a procedure against the assessment of 2023, can participate in the action as soon as they receive their assessment notice for the year 2024.
If you participate in this campaign every year from now on, you will be able to calculate the total net benefit for yourself.
TWERES will, of course, monitor developments and signal on its website any changes in tax regulations, legislation or case law that might affect the chances of successfully contesting the tax.
Indeed we do. There is no other possibility to challenge your tax assessment through an individual procedure. Only when the municipality issues a new tax regulation or when it revises the existing one, can a request be made to the Council of State to contest the regulation itself. The current tax regulations in the four coastal municipalities were issued in December 2019 and are valid until 2025.
On the other hand, it should be noted that anyone who starts an objection procedure via TWERES every year from 2020 onwards will have saved a considerable amount of money by 2025 if the procedure is successful.
No. Alongside this action, TWERES is looking for other ways to end the discriminatory taxation in the four coastal municipalities mentioned. Possible other ways can be legal procedures but also political pressure on various levels of government, both local, provincial, regional and federal.
The chance of a bad outcome for the four coastal municipalities (De Panne, Koksijde, Knokke-Heist and Middelkerke) is small, but of course not 100% non-existent. In that case, the tax must of course be paid (or, if already paid, will not be recovered). In addition, in this rather improbable hypothesis, you will not recover any of the lump sum of 400.75 euros that was paid to TWERES. Moreover, as the losing party, you will in principle also be ordered to pay the court costs and the legal fees for the other party. Unfortunately, it is not possible to give a general answer in advance about the procedural cost) owed by the losing party because:
In many situations (disputing one tax assessment of approximately 1,000 euros, as in Koksijde), in a procedure with two appeals and eventual success, the basic amount of the legal fees will be 2 x 600 euros (after the recent increase in the amounts). The minimum amount will then be 2 x EUR 300.
Since the end of June 2021, Test Achats offers on its website the possibility to download a model of objection letter for contesting the municipal tax on second homes in De Panne, Knokke-Heist and Koksijde. You must take care of the completion and registered mailing of the notice of objection yourself. If you wish, you can also download a free model notice of objection from the website of DSD Advocaten (the law firm with which TWERES cooperates).
However, at TWERES you do not need a model notice of objection because the TWERES lawyers will take care of the objection to the municipality on your behalf. Once your file is in the hands of TWERES, you need do nothing more and all formalities will be taken care of by TWERES and its lawyers. Moreover, merely submitting an objection to the municipality is not useful because the objection will always be rejected by the municipality anyway. It only makes sense to go to court afterwards.
TWERES’ lawyers conduct separate legal proceedings for each participant and, in the event of a favourable outcome, the payment of legal fees is also requested for each participant. This explains why, in the event of success, TWERES can reimburse 380.75 euros to each participant and why, in the event of success, the entire operation will cost only 20 euros, in addition to the annual membership fee of 10 euros.
TWERES asks for the payment in advance of a lump sum of 400.75 €, which covers everything. Moreover, the association and its lawyers take everything out of the hands of the participant, who does not have to do anything more than wait for the judge’s final decision. In the event of a favourable outcome – which is more than likely for Knokke-Heist, De Panne and Koksijde – the participant in the TWERES action will in principle recuperate € 380.75 so that the entire operation will eventually cost only € 20 net (+ € 10 annual membership fee).
However, TWERES welcomes the initiative of Test Achats with a positive outlook and considers it an interesting alternative for those who want to challenge the municipal tax in De Panne, Knokke-Heist or Koksijde.
Contrary to what is sometimes claimed, a class action is not possible in this type of tax dispute. Anyone who sends the participation form with the required attachments via the TWERES website or by e-mail to email@example.com, instructs TWERES to file an objection on his/her behalf against the tax assessment on the second residence. As you can read on your assessment notice, this objection must be made in writing within a period of three months, starting from the third working day after the date on which the assessment notice was sent. The right to object is a right granted to each individual taxpayer and cannot be exercised collectively – for example, by an association. Therefore, the lawyers have to start a separate procedure for each participant. After the rejection of the objection by the municipality within a period of six months or after expiry of this period, the TWERES lawyers will also file an application for each participant separately with the clerk of the court of first instance in Bruges. Each individual case must therefore be followed up separately, also because the periods within which an objection must be lodged or an application submitted to the court are different. Finally, the execution of the final decision is also different for each file, because some participants have already paid the tax, while others have not.
TWERES asks for the payment in advance of a lump sum of 392.75 €, which covers everything. For this amount, the association and its lawyers will take everything out of the hands of the participant, who will have to do nothing more than wait for the final decision of the judge.
The sum of €400.75 is made up as follows:
In the event of a favourable outcome – which is more than likely for Knokke-Heist, De Panne and Koksijde – the participant in the TWERES action will in principle receive € 380.75, so that the entire operation will ultimately cost only € 20 net (+ € 10 annual membership fee).
Conclusion: the lump sum that you pay to TWERES at the start of the procedure is not an “entry cost” but an “all-in” amount that will be almost entirely recovered in the event of a success. Therefore, do not be misled by very low entry costs (as low as € 50 published by some law firms), but calculate how much the procedure will ultimately cost you, in the event of success, at the end of the journey.
The entire procedure can take at least three years. After the objection has been lodged, the municipality has six months to communicate the decision of the Municipal Executive. If the municipality rejects the objection, our lawyer will submit your petition to the registry of the Court of First Instance in Bruges within three months. It will then take approximately 12 months for the case to be heard and for the court to give its ruling. The party ruled against in that ruling (yourself or the municipality) will then lodge an appeal against the ruling with the Court of Appeal in Ghent within three months of the service. The appeal procedure up to and including the final judgment will take about fifteen months. For the execution of the judgment (if the outcome is favourable, among other things the repayment of the illegally levied tax), at least another three months must be taken into account.
This calculation does not take into account possible proceedings before the Court of Cassation. However, a provision in cassation is only introduced once against one final judgment in one file concerning one tax regulation (e.g. the regulation of Koksijde of December 2019 that fixes the tax on second stays for the period 2020-2025). It can therefore not be completely ruled out that the first objection procedures initiated against the 2020 tax assessment (by individual taxpayers before TWERES started its action in October 2020) will take even longer. However, since the Court of Cassation has already decided, in a cassation judgment of 3 September 2015 concerning Koksijde, that the appeal court is competent to rule on the legality of a municipal tax regulation without violating the principle of the fiscal autonomy of the municipality, the chances of a cassation appeal by the municipalities have become very slim.
Once you have sent your participation form with the requested documents to TWERES via the website or via e-mail to firstname.lastname@example.org, you will have to wait a while (maximum 2 weeks but usually only 3 to 4 days) for the lawyers to compile and check your file. If everything is in order, TWERES will then send you an e-mail inviting you to pay the fixed fee. Once this has been paid, we will instruct the lawyers to send your notice of objection to the municipality within the legal deadline. You will then have to wait until TWERES sends you a message by e-mail with a copy of the notice of objection sent for you.
You will then have to wait several months until you receive a message from the municipality that the Municipal Executive has rejected your objection. This message may come quickly, for example within two or three months, but sometimes it can take longer than the six-month period within which the council must respond. The municipality will also send this message to the lawyers. If the lawyers have still not received a response from the municipality within about eight months, they will automatically file a petition on your behalf with the clerk of the court in Bruges.
The above does not apply to those who have sent a notice of objection to the municipality themselves. If they want to go to court via TWERES to contest the rejection of their objection, they will have to inform TWERES in time so that the three-month period within which an appeal can be lodged with the court against the rejection is not exceeded.
When the application has been lodged with the court, TWERES will send you a copy by e-mail. From that moment onwards the legal proceedings will start. This means that your case will be introduced at a first hearing and a pleading date will be set by the court. At the fiscal chamber of the court of first instance in Bruges, lawyers currently have to wait 10 to 12 months in principle, given the judicial backlog, to plead a case. The judgement normally follows within six to eight weeks thereafter.
We therefore ask you to be very patient. From the moment you have received the copy of the application, you will have to wait 12 to 15 months before you will hear from us again. In the meantime, TWERES will send you an e-mail from time to time to inform you of the first court decisions on the disputed tax regulations or any other relevant developments.