GLOBAL LOCAL PROPERTY TAXATION:
A WORLD OF EXTREMES
The Global Occupier Metrics Tool also takes into account
property taxation, which can have a significant impact on an
occupier’s decision on location.
Local property taxation (LPT) varies widely from country
to country and as such can be in an important factor in
assessing global occupancy costs and so it makes an
important part of the Global Occupier Metrics Tool.
In many countries LPT is insignificant or indeed non-existent
as an occupational cost. Portugal, South Africa and Italy all
have no occupational LPT, for instance in Italy the LPT is
paid by the landlord. Moving up the scale, France has LPT but
only if a property is located in Greater Paris where there are
three zoned rings which are charged at a general rate per
square metre, LPT in Paris is dependent on location but not
on property specification. In many cases there is no right to
appeal or it is not economical to do so.
LPT is however a significant occupational cost in a number
of countries including Australia, New Zealand and the U.S.,
and DTZ offers professional advice in respect of LPT in many
countries where it is a significant expenditure.
Valuation methods vary between capital based systems
and those based on rental values or even site value.
The frequency of revaluations also varies — countries
such as Australia and Holland have annual revaluations
whereas in the UK this is normally every five years. Former
commonwealth countries for instance generally have a
similar LPT system to that adopted in the UK.
LPT has been integrated into the Global Occupier Metrics
Tool to ensure that the model is robust enough to provide
real estate information that is of real value to our clients
when combined with other key metrics.
Nowhere in the world is LPT as high as it is in the United
Kingdom. LPT in the UK can often be as much as 60% of the
rental value of a property, and in some instances could be
close to 90%. Here DTZ can add real value to our clients.
Working on performance related fees our team have saved
our clients many millions of pounds and continue to do so.
There has never been a more important time to review LPT
as an occupational cost in the UK. Recent and upcoming
changes to legislation governing the tax in the UK mean that
successful appeals can yield more savings than before and in
October 2014 the appeal system is set to change becoming
more restrictive, this means that acting before the end of this
summer is important.
MARK HENDERSON
Senior Director, Rating
+44 (0)20 3296 4374
WORKPLACE
• Our company global standard is to provide 10 sq m net per FTE, is this likely to hurt
local practices in France?
• Workplace is central to the whole Tool and as well as driving the total occupancy
cost estimates, it also provides local best practice for each market allowing
occupiers to identify if proposed density remains within local cultural standards.
SUSTAINABILITY
• I am planning to relocate to Berlin — what sustainability regulations will I need to comply with?
Is BREEAM in use and recognised locally?
• The sustainability section of the Tool provides the local regulation around building environmental regulation
and Energy Performance Certificates, as well as highlighting most common certification systems.
LEGAL
• I am preparing to lease space in Sydney, what will be my obligations as an occupier?
OBLIGATIONS OF OCCUPATION
• The Tool provides a complete view on landlord and tenant obligations
arising around leasing practices, alongside a number of other
information such as typical fit out costs.
METRICS CONVERSION
• I occupy 200 sq ft per workstation in New York City, how does that compare to 15 NIA in the UK?
• The Tool automatically converts usable areas relevant to occupiers into over 60 different local lease area measuring practices,
whilst graphically depicting usable and lease areas; it also identifies the impact of building height on lease area requirement.
OCCUPANCY COSTS
• I need to locate a 200 FTE operation in Singapore, how many square metres will I require using local best practice and what will be
my annual occupancy budget?
• My total occupancy cost in Brussels for 50 FTE is $50,000, am I paying over the average market rate and what are my options to
reduce my costs?
SEE WHAT YOU CAN ACHIEVE
DTZ | In Situ 25
