One primary function of immovable property law obviously is to define the real property in question and to establish who the owner of that property is. Another primary function of immovable property law is to establish what restrictions and legal rights are attached to real property. By fulfilling these primary functions, immovable property law provides certainty regarding the legal status of real property to owners as well as to third parties. This certainty leads to greater confidence in the legal system as a whole as well as to the property market. Thus, well written immovable property law, and the correct application of it, leads to reduced investigation and transaction charges in relation to real property, which in turn promotes healthy turnover, the latter having a positive impact on the economy as a whole. All this is even truer for the rules that govern the taxation of immovable property, particularly in an international context. Whilst the taxing rights of two or more States are fairly easy to determine when real estate is held directly by taxpayers, problems may arise when real estate is held indirectly through ‘real estate companies’. Some of these problems are addressed by the OECD’s recent achievement, the so-called Multilateral Instrument.
Intertax