The Comisión Nacional del Mercado de Valores (CNMV), which oversees the stock market and listed companies, has urged caution when dealing with the change in the tax regime for Socimis, real estate investment trusts listed on the markets. The parties of the coalition government, PSOE and Sumar, have agreed this week to vote the ending of the tax advantages of these investment vehicles, although without specifying how. These companies, if they are listed on the stock exchange and distribute four-fifths of their income in dividends, enjoy a 0% corporate tax rate, an advantage that the two parties plan to eliminate in the 2025 budget, should it be approved.
The Commission also recalls that Socimis are not specific to Spain, they exist in similar forms in other European countries’. Up to 14 jurisdictions within the EU have vehicles of a similar type. In this sense, the CNMV points directly to the risk of relocation of the business, as the two largest companies in the sector, Merlin and Colonial, have raised this Wednesday.
The Spanish Association of Real Estate Consultancy Firms (ACI) warns that the government's proposed tax reform targeting SOCIMIs will put at risk €15 billion of investment transactions since 2014 in the sector in Spain. ACI's main Spanish real estate consultancies - BNP Paribas Real Estate, Catella, CBRE, Colliers, Cushman&Wakefield, JLL, Knight Frank and Savills - want to highlight that the plans of the Government and its parliamentary partners regarding SOCIMIs would represent a setback in competitiveness compared to other European countries and would aggravate the problems that already exist in the market.
ACI values the role of SOCIMIs as dynamisers of the real estate market, as they attract national and foreign investment. Therefore, it considers it crucial to maintain legal certainty and the current tax framework in Spain for a figure that has already demonstrated, since 2009, its success. ACI also stresses that SOCIMIs represent a minimal percentage of all rental housing in Spain, so that the impact of this change in taxation - as claimed by the Government and its parliamentary partners - would have a negligible impact on the increase in the supply of housing.
In the words of Ricardo Martí-Fluxá, president of ACI: ‘We believe that the Government should reconsider this change in the tax system so as not to jeopardise a path of years of success in the progress of SOCIMIs in our country. This decision could lead these companies to seek other destinations outside Spain where they can list and promote new assets. We reiterate our willingness to collaborate with the government to promote measures that have a real impact on the promotion of housing in particular and the real estate sector in general’.