REALWorld Law

Taxes

Ongoing costs of ownership

What costs/charges (other than tax) are payable by the owner of real estate and who are these payable to?

Angola

Angola

The owner of properties may pay condominium expenses, building insurance, building administration etc.

Australia

Australia

Council rates and water charges may be payable during the ownership of real estate. These costs and charges are payable regardless of the type of entity holding the real estate. The amounts payable depends on the Australian state or territory and council area in which the property is located.

Belgium

Belgium

Not applicable.

Bosnia-Herzegovina

Bosnia-Herzegovina

The real estate owner must pay for the general maintenance of the building and utility connections.

Canada

Canada

Ongoing costs would be those normally associated with ownership of real estate – for example repair and maintenance costs or property management fees.

China

China

Other costs and charges may be imposed at a local level.

Croatia

Croatia

Communal charges such as fees, waste disposal charges, etc are payable to the local authorities.

Czech Republic

Czech Republic

There are no special costs or charges associated with bare ownership of real estate by a corporate vehicle, however, in general, every owner of real estate has a reasonable duty to maintain that real estate which might result in certain costs being incurred.

Denmark

Denmark

There are none.

France

France

There are none.

Germany

Germany

Charges such as sewerage charges and waste disposal fees apply on an annual basis. Property owners may be obliged to pay for the development of an adjacent street. All these charges are payable to the local authority.

Hong Kong

Hong Kong

In addition to rates (local taxation), Government rent, profits and property taxes, there will be the necessary payments of utility bills, possibly management fees and other necessary regular payments. However, in the circumstances, these should not be of a great amount.

Hungary

Hungary

Costs and charges depend on the characteristics of the real estate. Generally, repair, maintenance and insurance costs, as well as utility fees, are payable. In the case of condominiums, common charges are payable (in some cases these include the cost of utilities).

As a general rule, these costs are paid by the owner of the real estate. However, where the property is leased, some or all of these costs are normally met by the tenant.

Ireland

Ireland

Direct investment

Local authority rates are payable by the occupiers of commercial and industrial property. These are based on property valuations which depend on factors such as location, square footage and the nature of the business. Rates can normally be claimed as a deduction against taxable income.

Irish Limited Liability Company

Local authority rates are payable by the occupiers of commercial and industrial property. These are based on property valuations which depend on factors such as location, square footage and the nature of the business. Rates can normally be claimed as a deduction against taxable income.

Italy

Italy

In addition to the ordinary costs of running the business, costs include the board of directors' fees, the board of auditors' fees and the external auditors' fees, where applicable.

Real estate investment funds also incur the cost of management fees paid to the management company.
 

Japan

Japan

  • Asset management agent fee – Under a GK-TK structure or a TMK structure, the vehicle is legally or practically required to outsource asset management to an asset management company;
  • repair costs and administrative maintenance fees;
  • fire insurance and earthquake insurance premium; and
  • collection cost of delayed rent (if any).
Netherlands

Netherlands

-

Nigeria

Nigeria

Professional fees of solicitors, property managers, estate agents and such other consultants engaged by the owner of real estate are payable by the owner. The owner is also responsible for maintenance of external structures and parts of the building.

Where the owner is the sole occupier of the property, the costs for services and utilities consumed in the property are payable by the owner. Also, the building insurance costs are the responsibility of the owner.

Norway

Norway

No costs are payable other than the usual costs relating to the management and maintenance of the real estate.

Poland

Poland

In the case of perpetual usufruct of real estate (a long-term right over state or municipally-owned property), a fee must be paid to the State Treasury or relevant local government unit. When a perpetual usufruct is established, an initial fee of between 15% and 25% of the value of the real estate is payable. This fee is paid only once and should not be paid again by the new perpetual usufructuary if the right is transferred. For each year of perpetual usufruct an annual fee is payable. This is between 0.3% and 3% of the value of the real estate (the exact amount depends on the purpose of the usufruct).

Where real estate is owned outright additional costs or charges may arise in connection with the development of the land, re-building or changes in the use of the buildings (eg stamp duty for a building permit or occupancy permit – the amounts depend on the type and area of the building).

The Polish Parliament has adopted an act on the transformation of the right of perpetual usufruct of land built-up with residential buildings into right of ownership. Pursuant to this act, starting from 1 January 2019, the right of perpetual usufruct of this kind of land was transformed into right of ownership. In that case the perpetual usufruct fees is no longer payable with respect to this kind of land. However, the new owner is obliged to pay the former owner a premium which is related to the transformation of title to the property. This premium is to be paid periodically for a period of 20 years since the above mentioned transformation. The amount of this periodical fee shall be equal to the value of the fee for the right of perpetual usufruct which would be in force on the date of the above-mentioned transformation.

Portugal

Portugal

Besides taxes, there are no other costs or charges payable in relation to the ownership of real estate in Portugal.

Romania

Romania

The owner will incur maintenance costs in relation to the property (the owner is obliged to keep the building in such a condition as will not harm neighbours or passers by) and utility company fees and garbage management fees which are paid to the municipality.

Russia

Russia

Under current legislation, there are no obligatory costs/charges payable on real estate owned by a company apart from taxes. In general, the owner of the real estate bears all expenses connected with the maintenance and operation of the property.

Slovak Republic

Slovak Republic

Not applicable.

Spain

Spain

The owner of a residential property (independently of the investment vehicle used to acquire ownership of the property) must pay costs related to the building's Property Owners' Association. These costs cover the maintenance of the elevators, the cleaning service, doorman, repair costs etc and vary depending on the nature of the property.

The amount to be paid depends on the share allocated to each property in relation to the building as a whole. If industrial operations carried out on the premises cause contamination or generate waste, a fee must be paid to the town/city council for special services relating to the removal of garbage and/or the cleaning of water or sewage. If the volume of waste generated by a retail property, office building or hotel is substantial (as is often the case) the owner is required to pay the town/city council a special fee for special services relating to the removal of garbage.

Sweden

Sweden

Not applicable.

Thailand

Thailand

Other than House and Land Tax and Local Development Tax, there are generally no taxes, charges, fees, duties, or assessments for ongoing ownership of immovable property, whether on a national or local level.

However, an owner of a condominium unit under the Condominium Act or of a residence unit under the Land Allocation Act is required to pay common expenses (known as Common Area Maintenance Fees or CAM Fees). Common expenses means expenditure required on common services and tools or facilities provided for joint use or joint benefit and expenditure required on maintenance and operation of common property as well as tax and duty costs (if any), based on the ownership ratio of common property of each co-owner. The CAM Fees amounts and timing for payment depend on the specific condominium's or residence's regulations.

United Arab Emirates - Abu Dhabi

United Arab Emirates - Abu Dhabi

This could comprise:

  • Registration dues for various types of transaction, including:
    • Mortgage
    • Mortgage redemption
  • Normal utility charges (and connection fees)
  • Security deposits on leases

In addition, leases are required to be registered in a new register maintained by the ADM pursuant to a new system known as Tawtheeq. The following fees are payable by the landlord under this system:

  • AED 1,000 per building registration (plus AED 5 for registration of each leasable unit)
  • AED 100 per registration of each new lease
  • AED 100 for renewal of a lease
  • AED 50 for termination of a lease
  • AED 50 for any further administration

Leases of four years and over are to be registered under the alternate register maintained by the ADM known as Tamleeq. The rules and process to registration are yet to be formally established. There are two different registration fees payable depending on the term of the lease:

  • For leases over four years but less than 25 years: registration fees are 1% of the first year’s rent
  • For leases over 25 years: registration fees are 4% of the value of the consideration

Responsibility for the registration fees can be provided for in the lease.

United Arab Emirates - Dubai

United Arab Emirates - Dubai

For residential properties (whether the tenant is a corporate vehicle or a natural person), a 'housing fee' is payable to Dubai Municipality each month. This is calculated as 0.5 percent of the purchase price (in the event the occupier is the owner) or 5 percent of the annual rent for tenants. The housing fee is not payable by nationals of the United Arab Emirates.

Owners of commercial property do not pay an equivalent fee but tenants of commercial property with a trade licence from the Dubai Economic Department (DED) have to pay 10 percent of their annual rent to the DED each year when they renew their trade licence.

Tenants also need to register their tenancy contract at the Real Estate Regulatory Agency (RERA). The fee to register a lease through RERA's online portal "EJARI" is AED 160 but if a lessee registers through an authorized DLD typing centre, an additional AED 35 is payable.

UK - England and Wales UK - England and Wales

UK - England and Wales

The owner and/or occupier of real estate in England or Wales is liable to pay either business rates or council tax, as well as rates for the supply of water. The amounts payable depend on the property's location.

UK - Scotland

UK - Scotland

The owner and/or occupier of real estate in Scotland is liable to pay either business rates or council tax, as well as rates for the supply of water. The amounts payable depend on the property's location.

Ukraine

Ukraine

Ukrainian companies owning commercial (ie non-residential) real estate do not pay any specific charges other than the normal taxes paid to the state. Utility costs are payable to state, municipal or private suppliers.

United States

United States

Typically, a business entity (such as a corporation, limited partnership or limited liability company) is required to pay fees and charges to the state where it is formed and each state in which it is registered to do business.

Zimbabwe

Zimbabwe

Municipal rates are paid on a monthly basis to the local municipality council.