WTS at Europe’s flagship real estate trade fair (4-6 October 2010)
“Real estate crisis can now be overcome”
World Tax Service part of the Munich´s joint exhibition stand at EXPO REALMunich, 27 September 2010 – The real estate crisis can probably be overcome quicker than expected. In the forefield to EXPO REAL WTS World Tax Service is talking of a “real estate renaissance”. As one of Germany’s largest tax consultancy firms, WTS will be exhibiting at Europe’s flagship trade fair for commercial real estate and investments from 4 to 6 October, 2010. The Munich-based company will be celebrating its 10th anniversary at the Bavarian state capital's stand (hall A1, exhibition stand 320).
“We can clearly see a silver lining on the real estate horizon”, says Winfried Figna, tax advisor, auditor and WTS board member. His company, which is based in Munich and represented all over Germany, regularly advises major real estate transactions from a tax point of view. Figna continues: “After a phase of market adjustment, the quality of the real estate and investment projects on offer is now the decisive factor. We at WTS are convinced that the consolidation phase will now begin. In many regions we are experiencing a true renaissance in real estate demand because other forms of investment are either too risky or have become unattractive.”
The WTS board of directors however, has no doubt that capital can no longer be raised in the amounts that were possible before the crisis. Through leverage in the form of high property mortgaging the return on equity prior to the crisis has increased substantially. The demands on invested capital are becoming higher. For this reason, the tax-optimized organization of real estate investments remains a continuous issue for the industry.
WTS anticipates a fundamental change in real estate tax within the scope of the community financing reform in the near future. Until now, real estate tax was calculated on the basis of unit values, some of which date back to the 1960s, in eastern Germany even to the 1930s. In August the Federal Fiscal Court made it clear that this kind of valuation was no longer constitutional. As a result Bavaria, Baden-Württemberg and Hessen have come up with a new model. The three southern federal states governed by the CDU/FDP coalition, have submitted a white paper that will serve as the basis for the reform.
The paper sets out that two properties within a municipality, which are used for the same purpose and have identical surface features should be taxed equally regardless of other factors affecting the value. Currently it is not possible to predict which model will be enforced.
The success of a real estate purchase is contingent on three factors, explains Figna: “Firstly, it has to make good business sense in itself. Secondly, it has to be tax-optimized in the short- and the long-term. And thirdly, when you make an investment you should contemplate about the means of exit.”
WTS AG Steuerberatungsgesellschaft advises its customers to choose suitable forms of investment for their particular situation. It is also defined which purchasing and holding structures should ideally be aimed for. Through WTS Real Estate Management, includes long-term, tax-optimized concepts developed for purchasing, restructuring and exiting real estate investments. A bewildering range of taxes are involved in real estate business – from land acquisition tax and sales tax to income tax. The WTS Alliance network offers the kind of international tax expertise that cross-border transactions require.
Current trends in the international property market will be reflected at EXPO REAL. In Poland, for example, prior to the 2012 European Football Championships, surfaces of land are being bought up for hotels, shopping centres and sports facilities. And despite, or precisely because of the ongoing slump in the Spanish property market, the Barcelona Economic Triangle will be also exhibiting. The region has more than seven million square meters of commercial property on offer for investors.
WTS is an experienced consultancy firm in the acquisition of major investments such as commercial property, shopping centres, hotels, holiday parks and large rental portfolios. Its experts on investment tax law are familiar with all the unit intricacies regulatory of international real estate markets. WTS board member Winfried Figna: “This advantage is appreciated by private and institutional investors, such as insurance companies and pension funds which subscribe the greatest part of the real estate funds' capital”.
Information on WTS board member Winfried Figna
Since graduating in business management and qualifying as an auditor and tax adviser, Winfried Figna has been involved in corporate tax consultancy. He previously worked in the tax department of Allianz SE and for the law firms Lovells and Freshfields. More recently, as a partner at Ernst & Young in the company’s Munich tax department, he primarily directed M&A transactions and corporate reorganizations as a specialist in real estate. Winfried Figna joined WTS Aktiengesellschaft Steuerberatungsgesellschaft in July 2005. Since 2010, he is a member of the board of the directors. On behalf of WTS, Figna regularly advises property companies and real estate funds in all tax aspects of major transactions and restructurings.
