Paulo Cordeiro de Sousa*
Let us imagine the following scenario: an individual is interested in purchasing an apartment for sale in Macau. The real estate agency prepares the promissory agreement for the sale and purchase of said apartment, and the owner and the referred individual execute the agreement. The promissory buyer makes an advance payment to the owner, and pays the relevant stamp duty within the following 30 days, pursuant to the law. Afterwards, the individual finds another apartment for sale, the apartment of his dreams. The owner of the first apartment is very sympathetic to the situation of the promissory buyer, and they both decide to terminate the promissory agreement – the owner may keep either part or all of the advance payment or even none at all, because they may also have just found another individual interested in buying the apartment. The ex-promissory buyer, who is not a very rich person and, as mentioned, wants to buy another apartment, is now trying to obtain a refund on the stamp duty that he paid with respect to the first now cancelled purchase. He goes to the tax department and is informed that he will only be entitled to a refund if he obtains a court decision stating the invalidity or ineffectiveness of the promissory agreement. I beg your pardon? Right! Article 52(2) of the Stamp Duty Regulations (“SDR”) sets forth this requirement. The agreement between the promissory seller and the promissory buyer regarding the termination of the promissory agreement is not sufficient, a court decision is required. Does it make any sense? It doesn’t! So let’s elaborate a little on the reasoning behind this.
The Real Estate Transfer Tax and Gifts and Inheritance Tax Code (the “RETTGITC”, approved by Law 5/99/M, as of 17 Dec.), provided for the taxation of the sale and purchase promises only when the property was handed over (traditio) to the promissory buyer. It also contained three legal presumptions whereby the property was deemed handed over if (i) the price had been fully paid, (ii) the keys had been given, or (iii) the contractual position had been assigned. These presumptions were obviously rebuttable upon proof to the contrary. This code was revoked in 2001 by Law 8/2001 and the taxation of the operations provided therein shifted to the SDR. This law, and later Law 4/2011 – an amendment to the SDR – established the taxation of all real estate sale and purchase promises regardless of an actual traditio taking place.
It is difficult to understand and is also an unnecessary burden to all, courts included, that tax refunds of all non-accomplished real estate sales and purchases be subject to court decisions. Also, certain judges view the intention of resorting to court with the sole purpose of obtaining the stamp duty refund, i.e. if no actual conflict exists between the promissory buyer and the promissory seller, as the promissory buyer lacking procedural interest and consequently, rule on dismissing such court action. The result of this interpretation may well be that the promissory buyer has no other legal means of obtaining the refund of the stamp duty already paid for.
In my opinion, only two solutions are possible: either (i) to return to the previous legal system provided for in the revoked RETTGITC, with tax being levied only upon the actual transfer of real estate or when the transfer of real estate is legally presumed (for instance, when the traditio of the real estate – actual or deemed – accompanies the sale and purchase promise) or (ii) to cease requiring a court decision to refund the stamp duty, should such stamp duty continue to be levied on all sale and purchase promises – at least when traditio did not occur.
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