Process: 101/2016-T

Date: September 21, 2016

Tax Type: Selo

Source: Original CAAD Decision

Summary

This arbitration decision (Process 101/2016-T) addresses the controversial application of Item 28.1 of the Portuguese Stamp Tax General Table (TGIS) to vertical property ownership. The taxpayer challenged Stamp Duty assessments totaling €12,174.04 for 2014, arguing that the Tax Authority unlawfully calculated the tax based on the aggregate taxable property value (VPT) of all divisions within a single building, rather than assessing each independent division separately. Item 28.1 of TGIS imposes Stamp Duty on properties intended for residential use with a VPT of €1,000,000 or more. The central legal issue concerns whether vertical property—a building under sole ownership containing multiple floors or divisions capable of independent use—should be treated as a single taxable unit or as separate units for Stamp Tax purposes. The taxpayer contended that the law's objective was to tax high-value residential houses, not to aggregate values of separate living units, and that treating vertical property differently from condominium ownership violates constitutional principles of tax equality and capacity. The Tax Authority countered that vertical property constitutes a distinct legal regime from condominium ownership, where only formally constituted autonomous units qualify as separate properties under Article 2(4) of the Property Tax Code (CIMI). According to the Tax Authority, when a property remains under sole ownership without legally autonomous units, Item 28.1 applies to the entire property as a single legal-tax reality. The tribunal followed standard CAAD arbitration procedures, including written submissions and dispensing with an oral hearing, ultimately examining whether the assessments violated CIMI Articles 12(3) and 119(1) and constitutional tax principles.

Full Decision

ARBITRAL DECISION

  1.  REPORT

1.1. A…, S.A., taxpayer no. … (hereinafter referred to as the Applicant), filed on 23/02/2016 a request for arbitral pronouncement, in which it requests, namely, the annulment of the Stamp Duty assessment acts relating to the year 2014 in the total amount of € 12,174.04, due to errors in the factual and legal premises.

1.2. His Excellency the President of the Ethics Council of the Administrative Arbitration Center (CAAD) appointed on 20/04/2016 as arbitrator Francisco Nicolau Domingos.

1.3. On 06/05/2016 the arbitral tribunal was constituted.

1.4. In compliance with the provision of art. 17, no. 1 of Decree-Law no. 10/2011, of 20 January (RJAT), the Respondent was notified on 06/05/2016 to, if it so wishes, present a reply, request the production of additional evidence and attach the Tax Administrative File (PAT) to the case file.

1.5. On 06/06/2016 the Respondent presented its reply in which it argues that the assessments in question should be maintained in the legal order, since they correctly apply item 28.1 of the General Stamp Duty Table (TGIS) and, consequently, be absolved of the claims.

1.6. The tribunal on 09/09/2016 decided to dispense with the holding of the meeting to which art. 18, no. 1 of RJAT refers, on the ground of the principle of autonomy of the arbitral tribunal in the conduct of the proceedings and in the determination of the rules to be observed in order to obtain, within a reasonable time, a substantive pronouncement on the claims made, see art. 16, paragraph c) of RJAT, granted a deadline for the parties, if they wish, to submit their final written submissions and scheduled a deadline for issuing the arbitral decision.

1.7. The Applicant submitted its final written submissions on 16/09/2016, concluding for the merits of the request for arbitral pronouncement.

1.8. The Respondent, in its final written submissions of 19/09/2016, argued that the assessments should be maintained in the legal order, given their legality.

  1.  SANATION

The cumulation of claims underlying the present case is admissible, insofar as it has as its object acts of assessment of the same tax, Stamp Duty. As there is also identity between the matter of fact and the merits of the claim depends on the interpretation of the same principles and rules of law, see art. 3, no. 1 of RJAT.

The proceedings do not suffer from nullities, no questions have been raised that prevent the examination of the merits of the case, the arbitral tribunal is regularly constituted and is materially competent to know and decide on the claim, consequently verifying the conditions for the final decision to be issued.

  1. SUBJECT MATTER OF THE DISPUTE

The Applicant considers that the Stamp Duty assessments with source in item 28.1 of TGIS relating to the year 2014 are unlawful.

More specifically, it argues that in the objective scope of such item of TGIS one should take into account the division of the property into units or divisions capable of independent use, with the same scope occurring in relation to each unit, in the case of one of these being intended for housing and having a taxable property value superior to € 1,000,000.00.

It adds that the assessments in question embody a misinterpretation by the Tax Authority (AT) of item 28.1 of TGIS, since they are based on the understanding that the taxable property value (VPT) relevant for tax purposes would be that resulting from the sum of the VPT of divisions capable of independent use and intended for housing, which, in its view, violates articles 12, no. 3 and 119, no. 1, both of CIMI.

Thus, it concludes that the property subject to the scope of item 28.1 of TGIS is, in this case, each of the divisions capable of independent use and the VPT to be considered is that of each of those divisions.

It further adds to its argument that the above-mentioned conclusion is also reached when resorting to the ratio legis that was at the origin of the legislative provision of item 28.1 of TGIS. Or, in other words, to create special taxation on properties of high value, affecting "...houses worth equal to or more than 1 million euros". A hypothesis that does not occur in the case at hand, since the configuration of a property composed of units with independent use does not indicate a residential use of the same, but rather a use unit by unit.

The Applicant also refers that the difference in treatment between properties held in sole ownership and properties held in condominium conflicts with the CRP, more specifically, with the principle of tax capacity, in its aspect of tax equality, insofar as it considers it indefensible that condominium ownership reveals a greater tax capacity in relation to sole ownership.

Finally, it petitions for the payment of compensatory interest, since the acts in question result from an error attributable to the Respondent's services and from which resulted the payment of tax entirely undue.

For its part, the Respondent states that a property held in sole ownership, with floors or divisions capable of independent use is different from a property under condominium ownership regime, constituted by autonomous units, that is, several properties. Thus, art. 12 of CIMI provides for the concept of property register, with its no. 3 respecting solely and exclusively the manner of recording cadastral data.

It also adds in its reply that the Applicant's thesis that there is no rule stipulating that the VPT of a property composed of several floors or divisions capable of independent use corresponds to the sum of their respective parts is devoid of sense, since, although the assessment of Stamp Duty (item 28.1 of TGIS) is processed in accordance with the rules of CIMI, the truth is that the legislator reserves aspects that lack appropriate adaptations, such as floors or divisions capable of independent use that are not considered as property for purposes of Stamp Duty.

In such line of argument it further adds that what results from the letter of the law is that the legislator intended to tax with item 28.1 of TGIS properties as a single legal-tax reality. Thus, the subjection to Stamp Duty in this case results from the combination of two elements: i) the residential use and ii) the VPT registered in the property register being equal to or superior to € 1,000,000.00.

Therefore, it argues, with respect to the case sub judice, that, since the property is held under sole ownership regime and does not possess autonomous units to which tax law attributes such qualification (because from the notion of property in art. 2, no. 4 of CIMI, only autonomous units of property held under condominium regime are considered as such), the assessments do not suffer from the vice of violation of law.

Furthermore, it lists a series of arguments to argue that the interpretation made of item 28.1 of TGIS does not violate the constitutional principle of tax equality and tax capacity.

Specifically, it states that the cadastral entry of each part capable of independent use is not autonomous, per property register entry, but consists of a description of the property in its entirety. Secondly, the rules on cadastral entry, the assessment procedure and also those relating to the assessment of parts capable of independent use do not permit stating that there should be an equalization of property held in vertical ownership to the condominium ownership regime. In sum, it argues that we are faced with two different civil-law regimes and tax law respects them.

Thus, it concludes that if item 28.1 of TGIS constitutes a general and abstract rule, applicable indiscriminately to all cases in which its factual and legal premises are met and the different valuation and assessment of a property held in sole ownership as opposed to one constituted under condominium ownership regime results from the different legal effects inherent to these two figures, one cannot conclude by an alleged discrimination in violation of the principle of constitutional equality, since we are faced with distinct realities and valued by the legislator in a different manner.

The Respondent further emphasizes that the taxation under Stamp Duty follows a criterion of adequacy, in the exact measure in which it aims at the taxation of wealth embodied in the ownership of real estate of high value, in the context of economic crisis, thereby aiming at maximum effectiveness as to the objective to be achieved with the minimum injury to other interests considered relevant. In this manner, it observes that the choice for this mechanism of obtaining revenue, facing the principle of proportionality, would only be legally objectionable if it proved indefensible. A condition that, in its view, does not occur, since the measure is applicable indiscriminately to all holders of real estate with residential use of value exceeding € 1,000,000.00.

Finally, it concludes arguing that the Applicant has no right to compensatory interest, since the Tax Authority cannot fail to act in accordance with the principle set forth in art. 266 of CRP and in art. 55 of LGT.

In summary, it argues for the complete dismissal of the request for arbitral pronouncement.

In this manner, the tribunal must address the following issues:

i) Whether the Stamp Duty assessments are unlawful due to errors in the factual and legal premises;

ii) Whether the Applicant is entitled to reimbursement of the amount of the assessments already paid;

iii) Whether the Applicant is entitled to compensatory interest.

  1. MATTER OF FACT

4.1. Facts deemed proven

4.1.1. The Applicant is the owner of the building registered in the property register under no. …, urban, parish of …, Lisbon.

4.1.2. Such building comprises, namely, 9 floors or divisions with independent use, registered as follows:

a) 1st E, with a VPT of € 133,080.13, housing;

b) 2nd D, with a VPT of € 139,844.63, housing;

c) 3rd E, with a VPT of € 132,800.00, housing;

d) 3rd D, with a VPT of € 139,844.63, housing;

e) 4th E, with a VPT of € 132,800.00, housing;

f) 4th D, with a VPT of € 139,844.63, housing;

g) 5th E, with a VPT of € 132,800.00, housing;

h) 5th D, with a VPT of € 139,844.63, housing;

i) S3rd E, with a VPT of € 126,543.88, housing.

4.1.3. The Applicant was notified of the Stamp Duty assessments relating to the year 2014, in relation to each of such floors or divisions with residential use, in the total amount of € 12,174.04 and which break down as follows:

a) 1st E, in the amount of € 1,330.80;

b) 2nd D, in the amount of € 1,398.45;

c) 3rd E, in the amount of € 1,328.00;

d) 3rd D, in the amount of € 1,398.45;

e) 4th E, in the amount of € 1,328.00;

f) 4th D, in the amount of € 1,398.45;

g) 5th E, in the amount of € 1,328.00;

h) 5th D, in the amount of € 1,398.45;

i) S3rd E, in the amount of € 1,265.44.

4.1.4. The building identified in 4.1.1 was not constituted under the condominium ownership regime on 31 December 2014.

4.1.5. On 13/07/2015 the Applicant filed an administrative appeal against the Stamp Duty assessment acts above identified.

4.1.6. On 27/11/2015 the Applicant was notified of the decision of the Head of the Administrative Justice Division, substituting, of the Finance Directorate of Lisbon explicitly rejecting the administrative appeal filed.

4.1.7. The request for arbitral pronouncement was filed on 23/02/2016.

4.1.8. The Applicant proceeded to pay the total amount of the assessments subject to the present case in the amount of € 12,174.04.

4.1.9. The payment of such assessments was made as follows:

i) 1st instalment:

a) 1st E, € 443.60, 20/04/2015;

b) 2nd D, € 466.15, 20/04/2015;

c) 3rd E, € 442.68, 20/04/2015;

d) 3rd D, € 466.15, 20/04/2015;

e) 4th E, € 442.68, 20/04/2015;

f) 4th D, € 466.15, 20/04/2015;

g) 5th E, € 442.68, 20/04/2015;

h) 5th D, € 466.15, 20/04/2015;

i) S3rd E, € 421.82, 20/04/2015.

ii) 2nd instalment:

a) 1st E, € 443.60, 14/07/2015;

b) 2nd D, € 466.15, 14/07/2015;

c) 3rd E, € 442.66, 14/07/2015;

d) 3rd D, € 466.15, 14/07/2015;

e) 4th E, € 442.66, 14/07/2015;

f) 4th D, € 466.15, 14/07/2015;

g) 5th E, € 442.66, 14/07/2015;

h) 5th D, € 466.15, 14/07/2015;

i) S3rd E, € 421.81, 14/07/2015.

iii) 3rd instalment:

a) 1st E, € 443.60, 19/11/2015;

b) 2nd D, € 466.15, 19/11/2015;

c) 3rd E, € 442.66, 19/11/2015;

d) 3rd D, € 466.15, 19/11/2015;

e) 4th E, € 442.66, 19/11/2015;

f) 4th D, € 466.15, 19/11/2015;

g) 5th E, € 442.66, 19/11/2015;

h) 5th D, € 466.15, 19/11/2015;

i) S3rd E, € 421.81, 19/11/2015.

4.2. Facts not deemed proven

There are no facts with relevance for the arbitral decision that have not been deemed proven.

4.3. Reasoning of the matter of fact deemed proven

        The matter of fact deemed proven originates from the documents used for each of the facts alleged and whose authenticity was not called into question.
  1. THE LAW

The first issue that the tribunal must address consists of ascertaining whether the subjection to the scope rule of item 28.1 of TGIS should be implemented by the VPT corresponding to each one of the divisions capable of independent use, or if, on the contrary, by the sum of the VPT of each of such divisions.

To carry out such task it is necessary to seek the rule whose parts disagree in its interpretation.

Article 1, no. 1 of the Stamp Duty Tax Code (CIS) and item 28 of TGIS provide that the following are subject to taxation: "Ownership, usufruct or right of superficies of urban properties whose taxable property value recorded in the property register, in accordance with the Municipal Tax on Real Estate Code (CIMI), is equal to or superior to € 1,000,000 – on the taxable property value used for purposes of IMI:

28.1 - For residential property (…) – 1%...".

Thus, it is necessary to scrutinize the concept of "residential property" to which the rule under interpretation alludes and that of "taxable property value used for purposes of IMI". Now, as it is not possible to resolve the issue using the CIS it is by force of the provision of art. 67, no. 2 of such diploma necessary to apply the rules of CIMI.

Consequently, article 2 of CIMI provides on the concept of property:

"1 - For purposes of this Code, property is any portion of territory, comprising waters, plantations, buildings and constructions of any nature incorporated or based thereon, with a permanent character, provided it forms part of the assets of a natural or legal person and, under normal circumstances, has economic value, as well as waters, plantations, buildings or constructions, under the previous circumstances, endowed with economic autonomy in relation to the land where they are located, although situated in a portion of territory that constitutes an integral part of assets of another or has no patrimonial nature.

2 - Buildings or constructions, even if moveable by nature, are deemed to have permanent character when intended for non-transitory purposes.

3 - The permanent character is presumed when buildings or constructions have been based in the same location for a period exceeding one year.

4 - For purposes of this tax, each autonomous unit, under the condominium ownership regime, is deemed to constitute a property".

The concept of property under IMI is, as we know, endowed with greater amplitude in relation to that set forth in art. 204, no. 2 of the Civil Code (CC) and encompasses three elements, more specifically, one of a physical nature, the second of a legal character and the last of an economic nature, J. SILVÉRIO MATEUS/L. CORVELO DE FREITAS, The taxes on real estate property. The Stamp Duty, Engisco, 2005, pp. 101 to 103 and JOSÉ MARTINS ALFARO, Code of the Municipal Tax on Real Estate – Commented and Annotated, Áreas Editora, 2004, pp. 118 to 123. The first requires reference to a portion of territory, comprising, in particular, buildings and constructions incorporated therein with permanent character. The element of a legal character requires that the thing, moveable or immoveable, belongs to the assets of a natural or legal person. Thirdly, the element of an economic nature requires that the thing has economic value.

As for the concept of urban property, art. 6 of CIMI describes its various categories, being fundamental for the classification in each of them, the nature of the use, that is, the purpose for which it is intended. And, nothing in the economy of art. 6, no. 1, paragraph a) of CIMI prevents classifying parts of a property held in vertical ownership, with floors or divisions capable of independent use, with a residential use, as "residential property".

Relevant is, it is repeated, its use. And a different conclusion is not possible to reach by the interpretation of art. 2, no. 4 of CIMI which elevates each autonomous unit, under the condominium ownership regime, to the category of property. In fact, also in this latter provision one cannot glimpse any basis for discriminating between properties held in condominium ownership and properties held in vertical ownership, with floors or divisions capable of independent use, as regards their classification as urban and residential properties, in accordance with the entire economy of item 28 of TGIS. In other words, if the legislator did not treat differently properties held in vertical ownership in relation to those constituted in condominium ownership, the interpreter should not do so[1].

On the contrary, the cadastral entry and the determination of the VPT demonstrate the similarity of legislative treatment. In fact, the parts endowed with economic independence should, each one of them, be subject to separate cadastral entry and, consequently, its respective VPT should likewise be recorded separately, see art. 2, no. 4, art. 7, no. 2, paragraph b) and art. 12, no. 3, all of CIMI. What has refraction in terms of assessment, insofar as there will be one for each floor or division subject to separate use.

Reverting such interpretation to the present case, there are 9 divisions of the building with independent residential use which, at the date of the tax fact, that is, 31 December 2014, was still not constituted in condominium ownership and, consequently, immediately, there are no doubts that they should be classified as urban residential properties.

It is also important to elucidate the other graphic segment of the item of the CIS under interpretation, namely, the "taxable property value used for purposes of IMI".

In this regard, as already described, CIMI provides for the autonomization of parts of urban property capable of independent use as regards cadastral entry and the specification of the respective VPT. Such observation is equally valid with respect to the consequent assessment, as provided by art. 113, no. 1 and art. 119, no. 1, both of the last cited diploma. In fact, if the tax is assessed "...based on the taxable property values of the properties (our emphasis) and in relation to the taxpayers that appear in the property registers (our emphasis)..." and the collection document should contain the "...breakdown of the properties, their parts capable of independent use, respective taxable property value and the tax collected...", such means that, not only is the VPT for purposes of application of item 28.1 of TGIS to be considered that which is subject to separate cadastral entry, but also nothing prevents the qualification as "residential property" of floors or divisions with independent use.

Now, if none of the divisions with residential use exceeded the VPT of € 1,000,000.00, the rule of scope in question cannot be applied to the case sub judice, under penalty of illegality. It is repeated, what is relevant, to delimit the scope of such rule, which the parties disagree in its interpretation: i) that the floor or division capable of independent use has a VPT superior to € 1,000,000.00 and ii) that it has a residential use.

This is also the conclusion of the state jurisprudence regarding the delimitation of the scope of item 28.1 of TGIS when it observes that: "In the case of a property constituted in vertical ownership, the incidence of Stamp Duty should be determined, not by the VPT resulting from the sum of the VPT of all divisions or floors capable of independent use (individualized in the property entry), but by the VPT attributed to each of those floors or divisions intended for housing", in accordance with the Decision of the Supreme Administrative Court of 09/09/2015, delivered in the framework of case no. 047/15 and in which the Rapporteur was Counselor FRANCISCO ROTHES.

In this manner, the assessments subject to these proceedings suffer from the vice of violation of law and, as such, cannot subsist in the legal order. Thus, the Applicant is entitled to reimbursement of the amounts of Stamp Duty paid by it and identified in 4.1.9 of the present.

Finally, the Applicant petitions for the payment of compensatory interest by the Respondent due to an error attributable to the Respondent's services.

In fact, art. 43, no. 1 of the LGT provides that: "Compensatory interest is due when it is determined, in an administrative appeal or judicial challenge, that there was an error attributable to the services from which results the payment of the tax debt in an amount superior to that legally due". In other words, there are three requirements for the right to said interest: i) the existence of an error in a tax assessment act attributable to the services; ii) the determination of such error in a process of administrative appeal or judicial challenge and iii) the payment of a tax debt in an amount superior to that legally due.

In this manner, it is immediately possible to formulate a question: is it admissible to determine the payment of compensatory interest in a tax arbitral process? The answer to the question is affirmative. In fact, art. 24, no. 5 of RJAT provides that: "Payment of interest, irrespective of its nature, is due, in accordance with the terms provided for in the General Tax Law and in the Tax Procedure and Process Code".

Addressing the issue, the illegality of the acts in question is attributable to the Respondent, in light of the lack of normative support at the time of their execution. Consequently, the request for payment of compensatory interest is warranted, calculated at the legal rate, in accordance with the provision of art. 43, no. 4 of the LGT, between the date on which the undue payment was made and until complete reimbursement.

  1. DECISION

In these terms and with the reasoning described above the tribunal decides to rule entirely in favour of the request for arbitral pronouncement, with the consequent annulment of the acts subject to pronouncement, return of the amounts unduly collected and the payment of compensatory interest.

  1. VALUE OF THE CASE

The value of the case is fixed at € 12,174.04 (corresponding to the sum of the assessments subject to pronouncement), in accordance with art. 97-A of CPPT, applicable by virtue of the provision in art. 29, no. 1, paragraph a) of RJAT and of art. 3, no. 2 of the Regulation on Costs in Tax Arbitration Processes (RCPAT).

  1. COSTS

Costs to be borne by the Respondent, in the amount of € 918, see art. 22, no. 4 of RJAT and Table I attached to RCPAT, insofar as the claim was entirely upheld.

Let it be notified.

Lisbon, 21 September 2016

The Arbitrator,

Francisco Nicolau Domingos

		[1] See in this regard the arbitral decision issued in case no. 50/2013 – T, of 29/10/2013, in which the functions of arbitrator were assumed by Dr. MARIA DO ROSÁRIO ANJOS.

Frequently Asked Questions

Automatically Created

What is Verba 28.1 of the Portuguese Stamp Tax General Table (TGIS) and how does it apply to vertical property?
Item 28.1 of the Portuguese Stamp Tax General Table (TGIS) imposes annual Stamp Duty on properties intended for residential use with a taxable property value (VPT) equal to or exceeding €1,000,000. Its application to vertical property is disputed: taxpayers argue it should apply separately to each independent division when their individual values exceed the threshold, while the Tax Authority maintains that vertical property—a building under sole ownership with multiple divisions capable of independent use—constitutes a single taxable unit. The controversy centers on whether the aggregate VPT of all divisions or the individual VPT of each division determines tax incidence, with significant implications for properties valued above the threshold collectively but not individually.
Can Stamp Tax (Imposto do Selo) be levied on a building that has not been divided into individual fractions?
Yes, according to the Tax Authority's interpretation, Stamp Tax under Item 28.1 of TGIS can be levied on a building in vertical property that has not been divided into legally autonomous condominium fractions. The Tax Authority distinguishes between vertical property (sole ownership with divisions capable of independent use) and condominium ownership (legally constituted autonomous units). When a property remains under sole ownership without formally established autonomous fractions, the Tax Authority considers it a single property for tax purposes. If the aggregate taxable property value exceeds €1,000,000 and the building has residential use, Item 28.1 applies to the entire property. This interpretation is contested by taxpayers who argue that divisions capable of independent use should be assessed separately, similar to condominium units.
How does the CAAD arbitral tribunal handle disputes over Stamp Tax assessments on real estate?
The CAAD (Centro de Arbitragem Administrativa) arbitral tribunal handles Stamp Tax real estate disputes through a structured procedure under the RJAT (Legal Regime for Tax Arbitration). After a taxpayer files an arbitration request, the CAAD President appoints an arbitrator who constitutes the tribunal. The Tax Authority is notified to present a reply and submit the administrative tax file. The tribunal may dispense with oral hearings based on procedural efficiency principles, allowing parties to submit written final arguments instead. The tribunal examines whether the disputed assessments comply with applicable law, including CIMI provisions and constitutional principles. Decisions address both factual and legal premises, interpret relevant tax code provisions, and resolve conflicts between taxpayer and Tax Authority interpretations of complex concepts like property definition and valuation methods.
What are the legal grounds for challenging Stamp Tax liquidation acts before the CAAD in Portugal?
Legal grounds for challenging Stamp Tax liquidation acts before CAAD include: (1) errors in factual premises underlying the assessment; (2) errors in legal premises, such as misinterpretation or misapplication of TGIS provisions; (3) violation of Property Tax Code (CIMI) rules, particularly regarding property definition (Article 2), cadastral registration (Article 12), and valuation (Article 119); (4) violation of constitutional principles, including tax equality and tax capacity under the Portuguese Constitution (CRP); (5) unlawful aggregation or disaggregation of taxable property values; (6) incorrect determination of the objective scope of taxation; and (7) claims for compensatory interest when assessments result from errors attributable to Tax Authority services, leading to payment of entirely undue tax. Taxpayers must demonstrate how the contested acts violate specific legal provisions or constitutional guarantees.
Does the concept of vertical property (propriedade vertical) affect the objective incidence of Stamp Tax under Portuguese law?
Yes, the concept of vertical property (propriedade vertical) significantly affects the objective incidence of Stamp Tax under Item 28.1 of TGIS, though the effect is heavily disputed. Vertical property refers to buildings under sole ownership containing multiple floors or divisions capable of independent use, but not constituted as legally autonomous condominium units. The controversy concerns whether such properties should be taxed as single units (with VPT calculated as the aggregate of all divisions) or as separate taxable realities (with each division assessed independently). This distinction is critical because it determines whether the €1,000,000 threshold applies to the building as a whole or to each division. The Tax Authority argues that vertical property lacks the autonomous units that characterize condominium ownership under CIMI Article 2(4), justifying treatment as a single property. Taxpayers contend this interpretation creates unjustifiable differences in tax treatment based on formal property structure rather than economic substance.