More Than 20 Grandeur Fortunes Plan to Transform Their Estate Into a Socimi

3/03/2014 – ExpansionPro

At least 20 large Spanish fortunes, three companies from Ibex and various communities and city councils are weighting up converting their patrimony into a Socimi (the Listed Investment Company in the Property Market, a Spanish counterpart of a REIT). Registered Advisor at the MAB, Antonio Fernandez from Armabex, confirmed the news, adding that currently there are 30 open files for companies yearning for the fiscal benefits a Socimi gives, such as 0% corporate tax rate (presently marking 30%) or no taxes on the property sales, provided that a property has been placed for at least 3 years in a Socimi´s portfolio.

Besides, another appealing incentive is an opportunity of capitalization that would allow liquidity. “However, some of the companies simply seek efficient ways of sharing estate yield among their family members as dividends” – explains Fernandez. Currently, the dividends for resident partners in Spain represent between 21% and 27% retention (none for non-residents).

During the last weeks, two first Socimis have become listed on the MAB: Entrecampos and Promorent. It is predicted that more of them will appear on the Alternative Stock Market in the forthcoming months, due to the number of the open files. The minimum free-float for a Socimi is €2 million or 25% of the capital that will guarantee a family office the fiscal benefits. Moreover, the future Socimi owner must pledge that at least 80% of their portfolio will consist of property or land of urban nature for rent. (…). What is more, 80% of income from the yield and 50% of the capital gains from asset sales must be divided via dividends if not reinvested.

The awakening of such vehicles shall be assigned to the amendment of the Law 11/2009 from 26th October in December 2012, that eliminated the corporate tax from Socimis (then at 18%) and allowed them to become listed on the MAB instead of on the Continuous Market.

 

Original article: ExpansiónPro (Ana Antón, Lunes 3 Marzo 2014, pp 12)

Translation: AURA REE

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