One way to realize land rights is an agreement combination. Combination transaction type sold parts, which is essentially an exchange, the landowner sells the land rights part of the contractor, in exchange for construction services on the remaining lands owned.
Then he deals a combination of the consideration is received by the owners of construction services, and is determined by the majority notional amount of compensation agreement, disputes often erupted between the payer and the director of real estate taxes of how value should be set for the calculation of the sales transaction betterment tax and purchase tax .
Recently the court discusses this issue about Kothari. In this regard called a land with a contractor agreement to sell 55% interest owned land in central Carmel in Haifa, which was built in an old building with two apartments, in exchange for building services contractor for the establishment of residential apartments.
Controversy over more than 2 million
Appellants (owner and builder) estimated the deal value of $ 3.6 million, based on construction costs of a similar project nearby contractor who built his same characteristics, as well as the fair included the fees of consultants and construction fees. The value of construction services per estimated by an appraiser on behalf of the appellants in the amount of NIS 6,600 per square meter, plus a discount factor and VAT.
By contrast, director of real estate taxes provided the deal is worth a total of 5.5 million, based on construction costs according to price list palm, comparing the costs of building other projects of other contractors who built the region, and together with the developer's profit rate of 15% and VAT. Adjuster Director Although the value of the land sold value comparison and came close to the fair value of the above construction services. the conclusion was that the value of construction services per square meter amounts to NIS 9,000 per square meter plus VAT.
As to the value of the preferred construction services appeals committee, headed by Judge Sokol, the position of director of real estate taxes. According to the Committee, on behalf of the appraiser's assessment of real estate taxation director was based more and more close to the conventional method of comparative judgments, and therefore to be preferred.
The appeals committee ruled that under the circumstances, the sale value is determined by the value of the construction costs, which constitute consideration for rights to land awaken, and that $ 5.5 million, a figure also takes into account indirect costs and profit builders and developers.
It should be noted that the addition of developer profit is an innovative and significant, because until now the tax authorities did not add to the entrepreneurial profit, but the profit Contractor. Moreover, the Court decided that consideration despite coming years is expected to be received not capitalize on the transaction date.
The writer is a law firm Meir Mizrahi