The Senate recently adopted a landmark decision concerning re-registration of property rights in the Land Book as a result of company reorganisation (mergers). In case of company mergers it may become necessary to re-register in the Land Book any existing property rights of the target company in the name of the acquiring company.
Previously the practice in this respect was diverse. Some Land Book departments required payment of state duty calculated on the basis of the cadastral value of the real estate property. Others considered that the amount of state duty should be derived from the alienation value of the real estate property as determined during the merger process. Yet other Land Book departments did not require payment of any state duty at all.
The Supreme Court, being the first instance court hearing appeals against decisions of Land Book departments, passed several rulings in September 2006, according to which the amount of state duty in these cases should be calculated from the higher of either the cadastral value, or the alienation value.
On 22 November 2006 the Senate brought to an end these inconsistencies, and ruled that no state duty should be paid if re-registration of property rights was requested as a result of a merger (Case No. SKC-869).
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Debora Pavila, associate at Sorainen Law Offices