Ireneusz Nowak
Market value of real estate as the tax base in tax on civil law transactions
Summary
In the article there are presented the problems connected with establishing the market value of real estate as the tax basis for the tax on civil law transactions.
In the publication it has been shown, among others, in what manner tax authorities, courts and the doctrine have performed the interpretation of market value of the subject of civil law transactions, with a focus on real estate, having in mind, that this subject still causes doubts and disputes in the process of applying law. Having this in mind, it is worth remembering, that establishing the market value of real estate needs to be performed in a reliable manner, so that all the elements prescribed in Article 6 clause 2 of the Act on tax on civil law transactions, comprising the market value of the subject of civil law transaction, that is: average price, turnover of the items of the same type and kind, location, condition and degree of wear and tear, without deducting the debts or burdens.
The author has proved that the method of establishing market value cannot be separated from the place and the date of the transaction, and moreover, market value of real estate cannot be identified with its book value. Also the similarities between real estate are not equivalent with their sameness, and on assessing the real estate there need to be taken into account also such parameters as, for instance: location, designation in the zoning plan, access, or broader opportunities of development. Moreover, on establishing the market value of real estate one cannot neglect the degree of wear and tear and limit oneself to establishing average prices, because both these criteria need to be used together.
It results from the establishing made in the publication, that summoning the tax payer by the tax authority to correct the value of the subject of civil law transaction in a situation, when the latter did not establish the value of the subject of civil law transaction or the value established by him does not correspond to the market value of the real estate, in the opinion of the tax authority, is from the procedural point of view an audit activity in the light of the section V of the Tax Ordinance Act.
At the same time summoning a person to establish the market value of real estate should be performed in a clear and precise manner, because it is the obligation of the tax authority to explain, on what basis it questions the value entered by the purchaser as not corresponding to the market price. Moreover, tax authority should give on the summons directed to the party to civil law transaction the market value of the transaction according to its own, initial assessment in the light of Article 6 clause 3 of the Act on the tax on civil law transactions.
In has been presented in the article, that when the tax payer, despite the summons of the tax authority of the first instance, does not verify the market value of real estate or again gives the value which does not correspond to the market value, then tax authority establishes the market value with the use of the opinion of experts or the opinion of an appraiser presented by the tax payer. It is worth noticing, that if the tax authority summons an expert, and the value established with taking into consideration his opinion differs more than 33% from the value given by the tax payer, the costs of the opinion are born by the tax payer. However, the cost of the legally defective opinion of an expert cannot be borne by the taxpayer, if the legal defects were essential and could not be validated.