Without energy, everything comes to a standstill. When speaking of energy, the emphasis is increasingly focused on alternative energy sources, partly stimulated by government measures (subsidies etc.). Often, people speak of ‘green’ energy and a good example is solar energy.
A recent decision of the Gelderland district court on solar panels aptly describes how the generation, storage and supply of solar energy may also have various important legal implications. This ruling is about a solar farm that is partly located in the municipality of Montferland. The solar farm consists of a solar power plant for the generation of electricity from solar energy by means of solar panels. In the context of a tax assessment on the basis of the Valuation of Immovable Property Act (WOZ), the central question was if this solar farm had to be designated as movable or immovable property. The levy officer of the municipality of Montferland believed it was immovable which resulted in a considerable property tax (OZB) assessment.
Immovable property
For the interpretation of the concept of immovable property in the property tax law (OZB), the court first falls back on section 3:3 of the Civil Code (Burgerlijk Wetboek). This section states, amongst others, that immovable designates the buildings and works that are durably connected to the ground, either directly or through a connection with other buildings and works. According to established case law, it is called durable connection with the ground if the relevant building is designed to permanently remain in place, according to its nature and construction. Whether a building is designed to remain in place permanently, results from the intention of the builder, insofar as this has been made public (amongst others Supreme Court ruling HR 31 October 1997, NJ 1998, 97 (Portacabin)).
Permanent designation
About 36,000 solar panels have been installed on the solar farm. Of those, about 24,000 are on the territory of the municipality of Montferland. The solar panels are on steel profiles that are attached to a steel base as well. The base is placed about 80 to 90 centimetres into the ground. The solar panels, the profiles and the base are fitted with bolts and nuts and are easy to dismantle. The solar panels are connected with cables and collection boxes to a transformer, which in turn – in short – is connected to a brick factory. Furthermore, the solar farm is enclosed with a barbed wire fence.
On the basis of these visible appearances, the court rules amongst others, that the solar park as a whole according to its nature and construction is designated to remain permanently in place and that this designation is expressed to the outside world. According to the court, the fact that the steel profiles and the base of the panels are easily dismantled and transported to another location does not affect the permanent designation.
Why interesting
In practice, the ruling is interesting for a number of reasons. Firstly, the court has decided that the solar farm is an immovable property and can, therefore, be pertained in the OZB. Moreover, the ruling is interesting for the finance practice. Surely, a right of mortgage and not a right of pledge may be established on an immovable property. For the litigation practice, and then mainly as a part of seizure, the distinction between movable / immovable property is important as well. Namely, to both types of property, various statutory provisions apply. The ruling clearly shows that the sector group Energy requires a multidisciplinary approach. Therefore, various specialists have combined knowledge and expertise in the Energy Team of LVH Advocaten in order to provide you with the best possible result.
Information
If you have any questions about or comments on this article, please feel free to contact the Energy Team of LVH Advocaten.
On behalf of the Energy Team, this contribution has been provided by Ben van Nieuwaal and Daniël van Genderen.
