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Domo Activos plans to abandon the SOCIMI tax regime
21 November 2019 | Vanessa Sousa

Domo Activos – company specialised in developing houses in order to rent them – should abandon the Sociedades Anónimas Cotizadas de Inversión en el Mercado Inmobiliario (SOCIMI) regime – that it’s equivalent to the REIT’s regime. The changes in rental laws are the basis for this decision.

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The issue should be debated and approved during the next extraordinary shareholders meeting which should take place on the coming 19th and 20th of December, as revealed by the company to the Mercado Alternativo Bursátil this Wednesday.

Within the same document, the company explained that «the legal modifications which were made this year brought several changes to urban rental regulation, such as the duration of the contracts, the limitation of the guarantees and the possibility to interfere directly and indirectly in the housing rental prices».

The company further admits that these changes challenge the company’s activity, as is the case of following through with the commitments assumed with other entities which financed the development of the assets; the deadlines for the assets to be available for sale which were initially set; and the increase in management costs. «These circumstances, which have a negative impact on the company’s results are passed on to the shareholders’ expected returns which were based on the initial business plan», concluded the company in the release.

Now the company is making an effort to change the focus of its business plan, which implies leaving the SOCIMI regime.