Successful Challenge of OZB Revaluation Results in Significant Tax Reduction
Successful Challenge of OZB Revaluation Results in Significant Tax Reduction
From XCG 60,082 to XCG 7,900: Court Limits OZB Revaluation
Josh Matos de Leon LL.M. successfully represented a taxpayer in a case in which an OZB assessment for the year 2023 was reduced from XCG 60,082 to XCG 7,900. The assessment of XCG 60,082 was initially imposed after the Inspector revalued the property, significantly increasing its taxable value. With the support of Cristina Halaby - de Freitas Bras LL.M., the revaluation was challenged before the Court of First Instance of Curaçao. The judgment provides an important confirmation of the limits of revaluation for OZB purposes.
The key issue was whether the Inspector was legally allowed to determine a new value for the year 2023 under article 8 of the Curaçao Real Estate Tax Ordinance (hereinafter: “LOZB”). The Inspector argued that, at the time of the purchase of the property by the taxpayer in the year 2022, the Inspectorate of Taxes became aware that the property had changed from undeveloped land into a developed property with a villa, which would justify a new valuation.
The Court emphasized that the burden of proof was on the Inspector to make it plausible that a relevant change within the meaning of article 8 LOZB had occurred. The Court rejected the Inspector’s position that a new valuation for the year 2023 was justified merely because the Inspectorate of Taxes only became aware later that the property had been developed. Article 8 LOZB refers to an actual change to the property itself in a relevant year within the five-year valuation period, not to the moment at which the Inspector becomes aware of that change. Since the Inspector did not provide proof that a relevant change within the meaning of article 8 LOZB had occurred, the Court held that there was no legal basis for a new valuation for the year 2023.
As a result and also based on additional information provided on behalf of taxpayer, the Court declared the appeal well-founded, annulled the revaluation by the Inspector, and reduced the OZB assessment for the year 2023 from XCG 60,082 to XCG 7,900.
Josh Matos de Leon LL.M. successfully represented a taxpayer in a case in which an OZB assessment for the year 2023 was reduced from XCG 60,082 to XCG 7,900. The assessment of XCG 60,082 was initially imposed after the Inspector revalued the property, significantly increasing its taxable value. With the support of Cristina Halaby - de Freitas Bras LL.M., the revaluation was challenged before the Court of First Instance of Curaçao. The judgment provides an important confirmation of the limits of revaluation for OZB purposes.
The key issue was whether the Inspector was legally allowed to determine a new value for the year 2023 under article 8 of the Curaçao Real Estate Tax Ordinance (hereinafter: “LOZB”). The Inspector argued that, at the time of the purchase of the property by the taxpayer in the year 2022, the Inspectorate of Taxes became aware that the property had changed from undeveloped land into a developed property with a villa, which would justify a new valuation.
The Court emphasized that the burden of proof was on the Inspector to make it plausible that a relevant change within the meaning of article 8 LOZB had occurred. The Court rejected the Inspector’s position that a new valuation for the year 2023 was justified merely because the Inspectorate of Taxes only became aware later that the property had been developed. Article 8 LOZB refers to an actual change to the property itself in a relevant year within the five-year valuation period, not to the moment at which the Inspector becomes aware of that change. Since the Inspector did not provide proof that a relevant change within the meaning of article 8 LOZB had occurred, the Court held that there was no legal basis for a new valuation for the year 2023.
As a result and also based on additional information provided on behalf of taxpayer, the Court declared the appeal well-founded, annulled the revaluation by the Inspector, and reduced the OZB assessment for the year 2023 from XCG 60,082 to XCG 7,900.
Key attention points
- Article 8 LOZB requires an actual change to the property: a new OZB valuation can only be justified if the property itself has changed in a relevant year within the five-year valuation period, for example through construction, improvement, or demolition.
- Knowledge of the Inspector is not decisive: the Court made clear that the timing of when the Inspector becomes aware of a change does not trigger article 8 LOZB.
- Burden of proof lies with the Inspector: where the Inspector relies on article 8 LOZB, the Inspector must make it plausible that a qualifying change occurred and in which year that change took place.
- The right to be heard matters: the initial decision on objection was also affected by the fact that the taxpayer had requested to be heard but was not heard before the initial objection was rejected.
- Significant financial impact: the OZB assessment was reduced from XCG 60,082 to XCG 7,900, following the successful challenge of the Inspector’s revaluation.
