The Spanish real estate sector stands up to the Government for its plans to abolish the tax regime enjoyed by SOCIMIs, and awakens the ghosts of Ferrovial’s flight to Holland. The two largest Spanish SOCIMIs, Merlin Properties and Colonial, threatened yesterday to move their headquarters from our country if PSOE and Sumar continue with their tax proposal and open a new front between the Executive and the Spanish business community. And they are not alone in his warnings. The National Securities Market Commission (CNMV) yesterday launched a very harsh and forceful response to the pact between the PSOE and Sumar to suppress the advantageous tax regime for Socimis. The stock market supervisor warns of a possible large flight of these companies outside of Spain due to the measure. «Changes in the tax conditions of these listed companies can have significant effects on the price and encourage their relocation to other European markets, which is why we ask for caution in the face of the changes that are being studied in the tax regime of SOCIMIs», indicate sources from the CNMV, who recall that in other European countries the same advantageous conditions exist for this type of companies. Standard Related News Yes The CNMV alerts the Government of a possible flight of Socimis from Spain and asks it caution Daniel Caballero The tax punishment agreed upon by the PSOE and Sumar worries the stock market supervisor Merlin and Colonial are two companies listed on the Ibex 35 and between them they account for around 40% of the total capital of 25,575 million accumulated by the 116 SOCIMIs that operated last year in Spain, according to the consulting firm Atlas Insight Assets Management. The two wings of the Government say that the measure seeks to address “the special tax regime by which they only pay 1% in Corporate Tax and which has not served to improve the supply of housing”, according to the literal meaning of what is stated in the agreement presented on Monday. An objection that Merlin rejected yesterday, pointing out that in the legislation enacted in the second term of Zapatero’s PSOE (it was approved in 2013 with Rajoy) the word housing was not even pronounced. The four largest listed Spanish companies (Merlin, Colonial, Árima and LAR) do not have residential assets in their portfolio. According to Asval, in Spain there are only twenty Socimis dedicated mainly to long-term rentals, with a market capitalization close to three billion. Socimis are companies dedicated to the acquisition and promotion of real estate assets that are required to be listed on the Stock Exchange. The tax advantage indicated by the Government allows them to pay 1% corporate tax in exchange for distributing at least 80% of the dividend among their shareholders. Undistributed profits do have a 15% tax. Last year, only 105 million euros were saved by the SOCIMIs due to this advantage, according to the Treasury’s tax benefits report. Merlin, whose investments focus on offices, shopping centers or data centers, assured yesterday that it is already evaluating “different scenarios and contingency plans” in defense of its shareholders, clients and employees in the event that the Government’s tax proposal goes ahead. , as submitted to the CNMV. Business sources assured this newspaper that among the measures being studied is moving its corporate headquarters from Spain, as Ferrovial already did last year. “All possibilities are being studied, and they are all.” The president of Colonial, Juan José Brugera, was even more accurate. «If the reform of the legal regime of SOCIMIs is approved, Colonial will reassess its investment strategy and the location of its activities and its legal structure, and will adopt, where appropriate, the measures that best suit the interest of its shareholders and investors, all with the aim that these potential measures do not have a negative impact on society,” the president said yesterday in statements to Ep. Clamor in the sectorThe real estate sector in its entirety believes that there is a lot at stake. The Spanish Association of Real Estate Consultants (ACI) says that the possible elimination of the tax regime for Socimis puts 15 billion euros in investment at risk since 2014. «The Government must reconsider this change; “could lead these companies to look for other destinations outside of Spain where they can list and promote new assets,” said its president Ricardo Martí-Fluxá yesterday. Asval has also positioned itself against the measure, which represents the owners of rental housing, both large like little ones. The ‘lobby’ defends the need to maintain the tax figure of SOCIMIs to increase the rental supply in Spain, contrary to what the Government promulgates. “Given the alarming deficit of available housing in Spain, what we precisely need, and urgently, is for the institutional residential rental sector to continue growing,” defends the general director of Asval, Laura Fernández. “It is not understood that the proposal is to impose more taxes on precisely the sector that Spain needs most now,” he adds. Fernández warns that, if it goes ahead, the measure will not only discourage new operators from coming, but will “accentuate the plans of disinvestment that have been implemented in recent years as a result of the increase in unbalanced measures.
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