The largest Spanish SOCIMI and real estate company listed on the Ibex, Merlin Properties, is revolting against the Government’s plan to change the taxation of SOCIMIs, which the company considers would mean de facto the “suppression” of its tax regime, as informed the National Securities Market Commission (CNMV) yesterday at midnight. The company assures that it is already evaluating “different scenarios and contingency plans” in defense of its shareholders, clients and employees in the event that the proposal set by PSOE and Sumar in the agreement signed on Monday on tax matters goes ahead, which points out to the elimination of “the special tax regime for SOCIMIs that only pay 1% in Corporate Tax and that has not served to improve the supply of housing.”
Merlin’s response has not been long in coming. The evaluation being carried out focuses, in the short term, on calculating the effective impact on cash flow of this proposal, which is expected to be limited “by the joint effect of various tax regulations.” While in the medium and long term, it focuses on determining the measures to be adopted to safeguard the interest of shareholders, clients and employees, “without excluding any legal possibility within our reach.”
The company led by Ismael Clemente regrets that the content of the agreement between the two wings of the Government “differs substantially” from the text of the amendments proposed by the socialist group and published in the Official Gazette of the Cortes Generales on November 7. But it reminds its shareholders that, as of today, “there is no evidence that this agreement has sufficient political and technical consensus for its approval.” To move it forward, PSOE and Sumar would require the consent of other political parties to reach the parliamentary majority necessary to move the measure forward.
The largest Spanish real estate company also reminds the Government that neither they nor the other three SOCIMIs listed on the Continuous Market operate in housing, “nor do many of the international commercial REITs with which we compete.” “In the current legislation on the SOCIMI regime, the word ‘housing’ is not even mentioned in the articles, so it seems clear that the legislator did not want to link this special regime with the residential market,” defends the Madrid-based group.
The company thus responds to its shareholders after the setback suffered yesterday on the stock market as a result of the publication of the Government’s plan. The value of Merlin’s shares plummeted yesterday by 7% to 9.4 euros and that of its counterpart Colonial, also on the Ibex, fell by 5% to 5.19 euros.
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