New program for REIT companies in Spain
Tuesday, June 16, 2009 @ 2:30 PM
Government will finally offer a more advantageous program to the new Listed Companies of Investment in Real Estate (Socimi), that the Anglo-Saxon world and the sector know as REIT. The main novelty is the exemption of 20% on incomes from house renting. The only condition is that at least 50% of the assets of the REIT need to be composed of housing. Law which will govern Socimi will be adopted today by the Committee on Finance of the Congress of Deputies and will be passed to the Senate.
This was an old claim by the property sector, which ultimately was not included in the bill that the Council of Ministers approved in November. REITs are companies that enjoy a privileged tax system to stimulate the rental market. Taxed at 18% corporate tax, instead of 30%, and dividends distributed to shareholders are tax exempt. To become a Reit, certain conditions must be fulfilled such as that 85% of revenues come from property rents, whether housing, commercial premises, offices or garages. In addition, the REIT must be listed on a regulated market are obliged to distribute to shareholders 90% of the profits from the rental.
Also today will be adopted a measure to reduce from 16% to 7% VAT paid by tenants in lease contracts with option to purchase.
( Information obtained from Cinco Días, 16-06-2009)
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