1. Tjalling Boswijk PwC Real Estate Advisory & Valuation PwC Hospitality
WOZ 2018
Tjalling Boswijk
PwC Real Estate Advisory & Valuation
PwC Hospitality

2. Agenda WOZ: What does it entail? WOZ-valuation: how do they do it?
Our vision on: hospitality real estate WOZ-valuations.
Latest observations: a few common errors.
Why object: what are the benefits?
WOZ-decision: what else is important?
Duration: approximately 15 minutes of your time.

3. PwC 12 maart 2015
WOZ What does it entail?
Annual valuation of immovable property by municipality.
Tax base for municipal real estate taxes (Owners tax/Users tax).
Tax base for Polder Board taxes (Watersysteemheffing).
The owner as well as the operator receive a WOZ-decree, usually within the first two months of the year.
The WOZ-decree needs to be challenged (if considered to be too high) by means of an objection procedure, within 6 weeks of the date (dagtekening) of the WOZ-decree.

4. WOZ-valuation guideline for hospitality real estate How do they do it?
PwC 12 maart 2015
WOZ-valuation guideline for hospitality real estate How do they do it?
Valuation guideline on hospitality real estate uses income capitalization
A theoretical average total revenue is calculated.
The market rent is calculated by means of a percentage of total revenue.
The market rent is then capitalized with a yield.
Municipality of Amsterdam now also uses direct comparison
Comparison is difficult (a lot of variables).
References are not analyzed properly.

5. Our vision on hospitality real estate WOZ-valuations
Municipalities continue to determine incorrect WOZ-values for hotels/hostels. The main reason is the incorrect application mandatory valuation fictions for WOZ valuations.
Fictions for WOZ-valuations:
- empty and without a lease and/or operation
full and unencumbered ownership ?
Market Value
WOZ-value
Value
Hotel
WOZ fictions

6. Latest observations a few common errors
Misjudgement of total revenue by the municipality.
Misjudgement of rental value, no insight in operation specifics.
Use of investment market yields for capitalization.
Incorrect adaption of vacancy risks in valuation.
Comparison with the average transaction price per room.

7. Why object A lower WOZ-value can lead to
Lower local levies.
Increase in fiscal depreciation potential.
Lower fixed costs impact the result on operations.
A successful objection procedure can have long term advantage.
Costs of an objection procedure are usually lower than benefit (long term).
PwC valuations and fiscal substantiations have already led to significant reductions of WOZ-values for our clients.
After objection and the recent decision appeal procedure by PwC, the WOZ-values of the 7 hotels in Amsterdam in our first case have on average a percent lower WOZ-value!

8. WOZ-decision What else is important?
PwC 12 maart 2015
WOZ-decision What else is important?
FY 2018
Objection within 6 weeks!
Request for the substantiation of the WOZ-value.
Request to be heard in your objection procedure.
Connect with PwC to do this for you!

9. PwC Real Estate Advisory & Valuation hospitality specialists
PwC 12 maart 2015
PwC Real Estate Advisory & Valuation hospitality specialists
Bart Kruijssen
Partner
Raymond van den Berg
Senior Manager
Tjalling Boswijk
Manager
PwC Hospitality Group Hospitality and leisure companies must meet the challenges of consumer trends, economic conditions, technology and competition. PwC joined knowledge and experience in the Hospitality Group. Specialists from Assurance, Tax and Consulting work together to improve and maximize investments and activities.