CASE OF GUBERINA v. CROATIA
Violation of Article 14+P1-1 - Prohibition of discrimination (Article 14 - Discrimination) (Article 1 of Protocol No. 1 - Protection of property);Reopening of case (Article 41 - Pecuniary damage;Just satisfaction);Non-pecuniary damage - award (Article 41 - Non-pecuniary damage;Just satisfaction)
Jon Fridrik Kjølbro;Nebojša Vučinić;Paul Lemmens;Georges Ravarani;Ksenija Turković
6. The applicant was born in 1969 and lives in Samobor. 7. The applicant owned a flat in Zagreb situated on the third floor of a residential building, where he lived with his wife and two children. 8. In 2003, three years after he had bought the flat, the applicant’s wife gave birth to their third child. The child was born with multiple physical and mental disabilities. 9. After the birth the child underwent a number of medical treatments and his condition was under the constant supervision of the competent social care services. In April 2008 an expert commission diagnosed him with incurable cerebral palsy, grave mental retardation and epilepsy. In September 2008 the social services declared the child 100% disabled. 10. In the meantime, in September 2006, the applicant bought a house in Samobor, and in October 2008 he sold his flat. According to the applicant, the reason for buying a house was the fact that the building in which his flat was situated had no lift and for that reason did not meet the needs of his disabled child and his family. In particular, it was very difficult to take his son out of the flat to see a doctor, or to take him for physiotherapy and to kindergarten or school, and to meet his other social needs. 11. On 19 October 2006, after he had bought the house in Samobor, the applicant submitted a tax exemption request to the tax authorities. He relied on section 11(9) of the Real Property Transfer Tax Act, which provided for the possibility of tax exemption for a person who was buying a flat or a house in order to solve his or her housing needs, if he or she, or his or her family members, did not have another flat or house meeting their housing needs (see paragraph 24 below). In his request the applicant argued that the flat which he owned did not meet the housing needs of his family since it was very difficult, and in fact becoming impossible, to take his disabled child out of the flat from the third floor without a lift, given that he was in a wheelchair. The applicant therefore submitted that he had bought the house in order to cater for his son’s needs. 12. On 6 May 2009 the Samobor Tax Office (Ministarstvo Financija – Porezna uprava, Područni ured Zagreb, Ispostava Samobor) dismissed the applicant’s request, giving the following reasons: “Section 11(9) of the Real Property Transfer Tax Act ... provides for tax exemption for citizens who are buying their first real property in order to meet their housing needs, under conditions which must be cumulatively satisfied, including the requirement that the taxpayer in question, or his or her family members, do not have another flat or a house meeting their housing needs. During the proceedings it was established that the taxpayer Joško Guberina had owned a flat measuring 114,49 square metres, in Zagreb ..., which he had sold on 25 November 2008 to ... Given that the surface of that real property, and in view of the number of the taxpayer’s immediate family members (five), satisfied the housing needs of the taxpayer and his immediate family, within the meaning of section 11(9.3) of the Real Property Transfer Tax Act, and given that it satisfied all housing needs in terms of hygiene and technical requirements as well as the basic infrastructure (electricity, water and [access to] other public utilities), under section 11(9.5) of the Real Property Transfer Tax Act, the taxpayer does not meet the cumulative conditions provided under section 11(9) of the Real Property Transfer Tax Act. It was therefore decided as noted in the operative part [of the decision].” 13. The Samobor Tax Office ordered the applicant to pay 83,594.25 Croatian kunas (HRK; approximately EUR 11,250) in tax. 14. The applicant appealed against the above decision to the Finance Ministry (Ministarstvo Financija, Samostalna služba za drugostupanjski upravni postupak; hereafter, “the Ministry”), and on 6 July 2009 the Ministry dismissed his appeal as ill-founded, endorsing the reasoning of the Samobor Tax Office. The relevant part of the decision reads: “Section 11(9) of the Real Property Transfer Tax Act (Official Gazette, nos. 69/07-153/02) provides for tax exemption for citizens who are buying their first real property in order to meet their housing needs. It further lays down conditions which the citizen must meet in order to demonstrate that he or she is buying his or her first real property in order to meet his or her housing needs. In this connection, one of the conditions laid down under indent 9.5 is that the citizen and the members of his or her immediate family must not have another real property (flat or house) meeting their housing needs; and indent 9.6 also provides that the citizen and the members of his or her immediate family must not own a flat, a holiday house, or property of a significant value (other property of a significant value can include a piece of land where construction is allowed) or a business premises where the citizen or his or her immediate family members do not exercise a registered [business] activity, whereby the value of the real property is similar to that of the real property (flat or house) which the citizen is purchasing. Given the rationale of the cited provisions and the facts of the case as established beyond doubt during the proceedings, [the Ministry] considers that the first-instance authority was justified in rejecting the appellant’s request for tax exemption ... The right to tax exemption exists if the citizen, or his or her immediate family members, at the time of purchase [of the real property], do not own, or did not own, another real property meeting their housing needs or a flat, a holiday house or other real property of a significant value. As this is not the situation in the present case, given that the appellant, at the time of purchase [of the house], owned a flat in Zagreb ... larger than the real property he was buying and in respect of which he sought tax exemption, it cannot be said that by buying the house the appellant was purchasing his first real property in order to meet his housing needs.” 15. On 7 September 2009 the applicant lodged an administrative action with the High Administrative Court (Visoki upravni sud Republike Hrvatske), arguing that in their decisions the lower bodies had ignored his specific family situation and, in particular, his child’s disability and therefore the housing needs of his family. In the applicant’s view, it was necessary to recognise that in his particular case the availability of a lift in the building was an infrastructural requirement on the same level as access to water and electricity in general. He also emphasised that the house was the first real property in respect of which he had sought a real property transfer tax exemption. 16. On 21 March 2012 the High Administrative Court dismissed the applicant’s administrative action as ill-founded, endorsing the reasoning of the lower administrative bodies. The relevant part of the judgment reads: “Given that the surface area of the flat [which the applicant owned] satisfied the needs of five members of the plaintiff’s family (provision 9.3) and that the flat at issue was equipped with the basic infrastructure and hygiene and technical requirements, the defendant correctly concluded that the plaintiff, in the given case, did not meet the conditions for a tax exemption set out in section 11(9) of the Real Property Transfer Tax Act. The arguments regarding the administrative action are ineffective in changing the decision in this administrative matter, and therefore the court considers that the impugned decision did not breach the law to the plaintiff’s detriment.” 17. On 25 May 2012 the applicant lodged a constitutional complaint with the Constitutional Court (Ustavni sud Republike Hrvatske) relying on Article 14 of the Constitution, contending, inter alia, that, given the specific accommodation needs of his family due to his child’s disability, he had been discriminated against by unfair application of the relevant tax legislation. He argued, in particular, that the competent administrative authorities had failed to correct the factual inequality inherent in his particular situation with regard to the ordinary meaning of the term basic infrastructural requirements meeting the housing needs of his family. 18. On 26 September 2012 the Constitutional Court, endorsing the reasoning of the lower bodies, dismissed the applicant’s constitutional complaint as ill-founded on the grounds that there was no violation of his constitutional rights. In particular, having examined his complaints from the angle of the right to a fair trial, the Constitutional Court held that no issue arose with regard to the other complaints relied upon by the applicant. 19. The decision of the Constitutional Court was served on the applicant’s representative on 11 October 2012. 20. The Government provided a report by the Ministry of Social Policy and Youth (Ministarstvo socijalne politike i mladih) of 6 November 2013, according to which the applicant’s child had been in receipt of monthly monetary allowances of HRK 1,000 (approximately EUR 130) in the period between 19 January 2006 and 10 September 2012, and allowances of HRK 625 (approximately EUR 80) from 11 September 2012 onwards. In addition, he had been involved in various therapeutic and social assistance activities, and for the period between 29 June 2010 and 2 October 2011 the applicant’s wife had been granted special status related to her child’s disability and had received inter alia, monthly payments of HRK 2,500 (approximately EUR 300). 21. According to the applicant, the annual expenses relating to his son’s special needs amounted to some HRK 80,000 (approximately EUR 10,400). This included HRK 28,800 for physiotherapy, HRK 4,500 for speech therapy, HRK 900 for a child neurologist, HRK 7,200 for drugs, HRK 21,175 for a wheelchair (with additional State support of HRK 8,900); HRK 7,200 for swimming therapy; and HRK 9,150 for daily transport to the day-care centre for ten months.