The final text introduced a series of significant changes to the bill sent to the Congress on December 19, 2008 including the following:
1.- The corporate purpose of the REIT has been broadened in scope to allow them to engage in building renovations.
2.- The minimum real estate and equivalent asset investment percentage has been lowered from 85% to 80%.
3.- The permissible income percentage for REIT secondary activities has been increased from 15% to 20%.
4.- Maximum outside financing percentage has been increased from 60 to 70%, allowing for a higher degree of debt for the REIT.
5.- The tax system for REIT income from leasing housing properties has improved for those cases in which said income equals at least 50% of their assets. Twenty per cent of said income is now exempt from corporate income tax.
6.- As regards indirect taxation, a lowering of the applicable tax rate for the Value Added Tax to 7% from the current 16% has been proposed for lease purchase contracts and to 4% from the current 7% for subsidized housing leasing.
7.- The reduced value added tax rate of 7% will apply to REITs who carry out building renovations in place of the current 16% rate.
8.- REIT incorporation or capital increase transactions are now exempt from the tax on property conveyances and documented legal acts.
For further information please contact Victor Manzanares: email@example.com