Faced with budgetary pressure, some Brussels municipalities are multiplying tax regulations targeting situations of planning offence. Behind this fiscal tool lies a fundamental legal question: can one tax what already falls under criminal law? The Council of State takes a strict position. The case law of the courts remains deeply divided. This legal uncertainty places landlords in a delicate position, between the opportunity to challenge and judicial uncertainty.
Municipal taxation targeting planning offences
It happens more and more often, particularly in the Brussels-Capital Region, that municipalities, always looking for funding, adopt tax regulations targeting buildings in a situation of planning offence.
This includes in particular:
- Buildings whose number of dwellings has been modified without a permit when such a permit was required (excess dwellings)
- Buildings whose use is irregular, for example a ground floor of a building that would, in legal terms, be a dwelling but is used as a shop without an urban planning permit authorising this change of use
The legality of this type of tax regulation has been challenged with varying success depending on the jurisdiction.
The illegality denounced by the Council of State
The Council of State, which controls the legality of administrative acts (and therefore of tax regulations), consistently holds that these tax regulations are illegal when they target buildings precisely because of their planning offence situation.
The legal reasoning
The Council of State's case law follows this reasoning: when a tax applies specifically because of the existence of a criminal offence, the triggering event of the tax, i.e. the element that makes the tax due, becomes identified with the offence.
Yet, the judges of the Council of State point out, offences fall under criminal law and municipalities cannot, through their tax power, punish a behaviour, adding to the sanctions already provided for by the legislator who created the offence.
In other words
A tax, which falls under the municipalities' tax power, even if established with the intention of limiting, deterring or discouraging an activity, is not a penalty and cannot be established because of the illegality of that activity.
A municipality can tax an activity, but if it targets a situation that is an offence situation, the Council of State considers that it steps outside its tax competence to, in reality, sanction the taxpayer, which falls under criminal law, and is illegal.
This reasoning, in our view, should be approved, the separation between taxation and penalty is one of the founding principles of Belgian administrative law.
Uncertain and contrasting court case law
The case law of the courts, faced with municipal tax regulations of this nature, is more disparate. Some jurisdictions also consider these tax regulations illegal and take up the Council of State's reasoning. Others, by contrast, consider these tax regulations legal by relying on the principle of municipal tax autonomy which would allow municipalities to tax the situation of their choice without limitation.
In Brussels, case law diverges between chambers
Thus, in Brussels, case law diverges between the chambers of the Court of First Instance. Some chambers consider these tax regulations illegal, others do not. It is obviously regrettable for the litigant to observe that their chances of success, in this type of dispute, depend on the chamber to which their case will be assigned.
This situation creates a real judicial lottery: two landlords in identical situations can obtain opposing decisions according to the chance of case allocation. A legal uncertainty that is hard to accept for litigants.
What if you are no longer within the deadline to apply to the Council of State?
The annulment appeal before the Council of State must be brought within 60 days of the publication of the tax regulation. Once that deadline has passed, the route is more complex, but the litigant is not entirely without arguments.
Argument 1: the non bis in idem principle
This principle, which prohibits being punished twice for the same act, can be invoked in certain precise circumstances. If a criminal or administrative procedure has already sanctioned the planning offence, the application of a tax regulation on the same situation may constitute a prohibited double sanction.
Argument 2: the municipality does not prove the offence in law
It is often possible to argue that the municipality does not prove in law the planning offence that is the subject of the taxation. It is not up to you to prove the absence of an offence, it is up to the municipality to prove the existence of the offence.
The case of excess dwellings predating 1996
For tax regulations that tax excess dwellings, i.e. dwellings created without an urban planning permit when one was required, it can sometimes be argued that the new dwelling was created at a time when no permit was required. Such a permit is in fact only certainly required since 1996.
The case of disappeared archives
In some disputes, particularly because the archives have disappeared, the municipality may find itself unable to demonstrate, in law, that it is indeed an excess dwelling, i.e. a dwelling created, in breach, without a permit when such a permit was necessary. In this case, the tax is not due because the municipality cannot demonstrate in law that the dwelling was created at a time when an urban planning permit was required. In this specific case, the court can annul the tax.
Practical recommendation for affected landlords
If you receive a municipal urban planning tax regulation in Brussels, do not pay without verification. Proceed step by step:
1. Verify the characterisation of the situation
Does the tax regulation target a situation that the municipality characterises as an offence, or does it neutrally tax a factual situation (for example a building in good condition used as a dwelling)? This distinction is decisive: only tax regulations that expressly target offences are vulnerable to the Council of State's argument.
2. Check the deadlines
If the tax regulation is recent (less than 60 days old), an annulment appeal before the Council of State remains possible. Beyond that, you will need to challenge the individual assessment before the Court of First Instance.
3. Document the situation
Gather all documents that demonstrate the anteriority of the situation to 1996, old plans, aerial photographs, neighbour testimonies, old leases or title deeds. The older the situation, the higher the chances of success.
4. Consult a specialised lawyer
This matter is technical enough to justify the advice of a lawyer specialised in Brussels administrative and planning law. Specialised law firms know the "favourable" and "unfavourable" chambers of the Court of First Instance and can help you concretely assess your chances of success.
In conclusion: a grey zone to monitor
Brussels urban planning tax regulations constitute a legal grey zone characteristic of the tensions between municipal tax autonomy and individual guarantees. The Council of State has ruled in a way favourable to taxpayers, but the divergence of analysis within the Courts of First Instance remains a factor of judicial uncertainty.
For affected landlords, challenging remains a viable route, particularly when the alleged planning offence is old or poorly documented by the municipality. The analysis, conducted by Michael Pilcer and Nicolas de Bonhome, partner lawyers at the Legacity law firm, highlights the importance of specific expertise before any payment.
For further reading, see also our article on behavioural property taxes, another example of the tax creativity of Belgian municipalities.
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