NETHERLANDS Law and Practice Contributed by: Coco van Zuiden, Marijn Bodelier, Sabine Schoute and Simone Wijngaard, Greenberg Traurig, LLP
2.10 Taxes Applicable to a Transaction No stamp duties or similar documentary taxes are levied in the Netherlands. The acquisition of real estate is generally sub - ject to 10.4% real estate transfer tax (RETT), levied from the acquirer, on the property’s fair market value (or, if higher, the purchase price). The acquisition of (partial) beneficial ownership of real estate located in the Netherlands is also subject to RETT. Furthermore, the acquisition of shares in a quali - fying real estate company is a deemed acquisi - tion of real estate, which is subject to 10.4% RETT if the acquirer obtains a “substantial inter - est” (of at least one third) in such company. RETT exemptions may apply where the acquisi - tion concerns newly constructed real estate or building land (see 8.2 Mitigation of Tax Liabil- ity ). RETT reductions may apply if the acquisi - tion takes place within six months of a previous acquisition of the same real estate. 2.11 Legal Restrictions on Foreign Investors Subject to sanction regulations, there are no legal restrictions on foreign investors acquiring real estate in the Netherlands.
the investor(s), in the form of share capital, a share premium or (although legally not consid - ered as equity) subordinated (shareholder) loans. Terms of the financing depend on the size and complexity of the financing and the relevant property, and whether the relevant lender(s) has a syndication strategy, in which case documen - tation will be based on Loan Market Associa - tion (LMA) standard forms. For smaller and more straightforward financings by a single Dutch lender, financing will typically be provided on the basis of standard bank documentation. 3.2 Typical Security Created by Commercial Investors The main types of security for a lender are in rem security rights (mortgage and pledge) and secu - rity rights in personam (guarantees), albeit that real estate finance is generally non-recourse, which means that lenders will not have recourse (via guarantees or similar security) against the investors of the borrower. A Dutch law in rem security right can only secure monetary payment obligations. Typically in Dutch real estate financings, lenders will require the following: • a right of mortgage on the land and building – this is the most relevant asset; • a right of pledge on movable assets; • a right of pledge on receivables (including bank accounts, lease receivables, intercom - pany receivables, insurance receivables, etc); and • a right of pledge on the shares in the bor - rower. If Dutch law in rem security is created in favour of an agent or trustee for the benefit of other parties, a parallel debt is required, as it is gener -
3. Real Estate Finance 3.1 Financing Acquisitions of Commercial Real Estate
Acquisitions of commercial real estate typically entail a special purpose vehicle (SPV) attract - ing senior (or mezzanine, via a holding company of the SPV) financing from banks, alternative or institutional lenders, while receiving equity from a holding company. Equity will be provided by
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