Tag: Pablo Iglesias

New Legislation Stipulates that Residential Rental Contracts will Last for 5 or 7 Years

15 December 2018 – Expansión

On Friday, the Council of Ministers gave the green light to a royal decree of urgent measures relating to housing and the rental sector. The Minister for Development, José Luis Ábalos, highlighted that the majority of evictions occur due to a failure to pay the rent, whilst the number of mortgage foreclosures has decreased.

The main measures with respect to rental are: extending the term for the extension of leases, from three to five years – or up to seven years if the lessor is a legal entity – and increasing the term for tacit renewals from one to three years. Also, limiting the deposit to two months as a guarantee, facilitating agreements between tenants and owners to improve housing, management expenses shall be borne by the lessor when that is a legal entity, improving the remission of tourist rental contracts and horizontal ownership so that three fifths of the residents can limit tourist apartments, amongst other measures.

Nevertheless, the minister highlighted that this decree does not include measures aimed at intervening in rental prices, as had been agreed with Unidos Podemos in the budget agreement. However, he did not rule out that they may be included within the framework of the budget negotiations for next year.

For the time being, and precisely due to the absence of these measures in terms of prices, Pablo Iglesias has warned that the vote of his party to approve this decree-law will be “unfavourable”.

“We had agreed something else with them in the budgets, that the housing measures had to include controls over rental prices to decrease rental prices”, he said when the measures in the decree were made public.

“We hope that they are rectified so that we can go ahead with this decree, provided that it has the same content that we agreed”, added Iglesias, who also declared in a tweet that “the Government’s decree does not contain the most important measure from the agreement: that of prohibiting abusive increases in rental prices”.

Original story: Expansión

Translation: Carmel Drake

Sánchez’s Government Lets Socimis & Sicavs Off the Fiscal Hook Despite Podemos’s Efforts

16 October 2018 – El Independiente

The Government has managed to dodge two demands from Podemos that had raised concerns in the financial community: the taxation of Socimis and the conditions of Sicavs, the companies that wealthy fortunes use to manage their assets.

The Budget Plan for 2019 approved on Monday at the extraordinary council of ministers does not allude to these two vehicles, despite the contumacious struggle by the purple party to put an end to their benefits. In fact, the Government led by Pedro Sánchez and Podemos had signed an agreement for the budget plan for next year, which included modifications to the conditions of both companies, but, in the end, that has been ruled out.

The aforementioned agreement, published on 11 October, included increasing the tax on Socimis (…), which currently operate under a special tax regime for collective investment institutions (funds and Sicavs).

For the income obtained during the exercise of their main activity (rental and leasing of properties), Socimis pay tax at a rate of 0%. And for income that they receive from other types of activities, they pay tax at a rate of 25%.

The pact between the Executive and Podemos was going to mean applying a tax rate of 15% on the profits not distributed by those entities. In the end, that measure does not form part of the budget for 2019.

The other victory earned by Sánchez over Pablo Iglesias stars Sicavs. Both parties had agreed to tighten control over these vehicles to avoid their fraudulent use. In the end, they will be subject to the same supervision that has applied to them until now.

The agreement had involved granting the inspection bodies of the Tax Authorities the competence to declare, for exclusive tax purposes, the breach of the requirements established for the Sicavs in the financial legislation. In other words, it gave powers to the institution to ensure that the vehicles had, as required by that law, 100 genuine shareholders, to combat the typical practice whereby a single investor controls most of the capital (…).

Similarly, the Government and Podemos had reached an agreement to “establish additional requirements for application by the Sicavs of a reduced tax rate aimed at ensuring their nature as collective investment instruments, for example, the establishment of a maximum capital concentration in the hands of a single investor (including the stakes of related individuals and legal entities). However, that measure, although it may reduce the volume of capital that these entities receive, would objectify the collective nature of these investment vehicles, facilitating their regularisation by the Tax Agencies in the cases of fraudulent uses of Sicavs”.

Taxes on the banks

The entities that have, for the time being, not managed to free themselves from the tax blow are the banks. The Government wants the next budget to include a specific tax that targets financial transactions. The so-called Tobin tax has already met firm opposition from the banks and regulators, which warn of the risks that its implementation would have for the growth of the economy.

The Government’s forecast is that the proceeds raised from such a tax would reach €850 million, according to the Minister for Finance, María Jesús Montero (…).

Original story: El Independiente (by Ana Antón)

Translation: Carmel Drake

Spain’s Government Wants to Prohibit the Sale of Public Housing to Vulture Funds

12 September 2018 – El Mundo

The Government wants to give a new impetus to the housing policy in Spain and has placed social housing at the centre of its strategy. In this context, the President of the Executive, Pedro Sánchez (pictured below), has announced to the Congress of Deputies, that the new law he is preparing will configure social housing as a public service to ensure access to it for all citizens and moreover, to put a stop to the sale of public homes to the so-called venture funds.

During his speech at the control session of the Government, Sánchez announced that the State Attorney will appear in court regarding a criminal case into the investigation of the sale of 5,000 public rental homes undertaken by PP governments in the Community of Madrid and the Town Hall of the Spanish capital to private equity funds in 2012 and 2013.

The Institute of Housing in Madrid (Ivima), of the regional Government of Madrid, sold 2,935 public rental homes in 2013, whilst the Town Hall of Madrid, through the Municipal Housing and Land Company (EMVS), sold 1,860 homes of the same kind in 2012, according to Efe.

“We are not going to stop until the administrations that are behind this intolerable abuse, which has affected so many people of limited means, assume their political and economic responsibilities”, said the President.

The demands of Iglesias

Sánchez responded in that way to the Secretary-General of Podemos, Pablo Iglesias, who has also called for other measures to put a stop to the rise in residential sale and rental prices in Spain, including, “ending the privileges afforded to Socimis, the commercial companies that operate in the real estate market and which are taxed at 0%”.

The leader of Podemos also requested that “large owners and venture funds, who own more than ten homes” be forced “to put those properties on the market”, and he proposed that “it is fundamental that the Town Halls be given authority to declare certain urban areas as “stressed markets” so that rental prices there can be regulated”.

Original story: El Mundo (by María Hernández)

Translation: Carmel Drake

Podemos & the Tax Authorities Negotiate a Stricter Fiscal Framework for Socimis

11 September 2018 – Expansión

Podemos and the Government are studying measures to put a stop to the “rental bubble in Spain’s largest cities”, which Pablo Iglesias argues is being caused by the tax advantages being afforded to the Socimis.

The Tax Authorities and Podemos are negotiating a stricter fiscal framework for Socimis. That is according to sources at the negotiations, and to an announcement made by the leader of Podemos, Pablo Iglesias (pictured above, right), after his meeting with the President of the Government, Pedro Sánchez (pictured above, left), on Thursday.

Iglesias spoke of an “understanding” on this point and of advances in the negotiations. Although the fiscal framework of these real estate investment companies has always been under Podemos’s spotlight, it did not mention it in the document that it sent to the Tax Authorities in August detailing its requests, in exchange for its support of the Budgets. But, that was not a question of “limited demands”, according to sources at Podemos, who are now negotiating measures with the Executive to put a stop to the “rental bubble in Spain’s largest cities”. And, in Podemos’s opinion, the beneficial legislation afforded to Socimis explains this bubble, and it needs to be addressed urgently. Iglesias will spend tomorrow questioning Sánchez in the control session of the Government in Congress regarding the “measures that the Executive plans to adopt to put an end to the rental housing bubble”.

“We need to discourage the promotion of these types of companies, which foster the bubble model, undermine the public coffers and represent an affront to competition. We think that the special framework for Socimis, whose main feature consists of a Corporation Tax rate of 0%, needs to be reversed”, said Podemos recently in a document (…).

In this latest document, Podemos therefor, therefore, to put an end to this zero tax rate for Socimis, compared with the nominal tax rate of 25% (…). The negotiations with the Tax Authorities are based on the premise that Podemos wants to bring the tax rates for Socimis in line with those applicable to other companies. However, it does not rule out that the measures agreed will be aimed at having more control over their tax framework.

Zapatero’s Government created Socimis in 2009 in an attempt to revitalise the real estate market, inspired by the REITs (Real Estate Investment Trust) from the Anglo-Saxon world. They enjoy a very beneficial tax framework. Their Corporation Tax rate is 0%, provided they fulfil certain requirements: the minimum share capital must amount to at least €5 million (…); the funds must be invested in properties; a minimum of 80% of the profits obtained from rental must be distributed as dividends; and at least 80% of the value of the assets in urban buildings must be leased for at least three years.

Unlike the Sicavs, there is no requirement for Socimis to have a minimum number of shareholders, but their shares must be admitted for trading on a regulated market (…).

Following the economic recovery and the boom in the real estate market since 2013, the Socimis are enjoying a golden period (….).

Original story: Expansión (by Mercedes Serraller)

Translation: Carmel Drake

Podemos Positions Itself Against Socimis & The RE Recovery

26 April 2016 – Negocios.com

The political party led by Pablo Iglesias (pictured above) wants to put a stop to these investment companies, which are responsible for investing billions of euros each year.

Podemos has proposed an attack on the Socimis (listed real estate investment companies), whose appearance has helped the recovery of the real estate sector in recent times. Pablo Iglesias has put the tax structures of Socimis, private equity firms and entities holding foreign securities (ETVE) in the firing line; he says that he wants to “ensure productive investment and tax equity”. And it is true that the tax treatment of Socimis is different to the rules that apply to other companies, but the Socimis also have to comply with certain requirements, such as holding share capital of €5 million, and not €3,000 like an SL, and listing on the stock exchange, such as the MAB, IBEX 35 or Main Market.

– Tax rate of 0%. Socimis are taxed at a rate of 0% for Corporation Tax purposes.

– Special rules need to be taken into account for entities that have been taxed under a general regime that start paying tax under the Socimi regime: if ownership of a property is transferred prior to the application of the Socimi regime, then the rental income shall be understood to be generated on a linear basis (unless proven otherwise) during the holding period, and so the previous tax regime and the Socimi regime will be applied to the rental income on a proportional basis.

In addition, Podemos also wants to axe Sicavs, control the shareholders and the money in cash, limit the maximum percentages per shareholder and have them monitored by the Tax Authorities and not by the CNMV like now.

Encourage “informers” and allow tax inspectors to work under cover in order to combat tax fraud. The informer would be rewarded with some of the economic fine imposed on the offender, whilst a fund would be created for paying tax confidants.

This is part of the Comprehensive Plan to Combat Fraud that will be presented to the Economic Committee on Wednesday. According to the text, tax revenues would increase by between 1% and 1.5%.

Moreover, Podemos considers that it would be worthwhile to integrate all of the networks of the Tax Authorities and the regional and state Social Security departments for greater coordination.

Meanwhile, Podemos’s proposals also include lowering the criminal liability threshold for tax offences to €50,000, as well as increasing, in general, the “prescription period” to ten years, applying the penalties currently provided for when the defrauded amount exceeds €120,000.

Original story: Negocios.com

Translation: Carmel Drake

International Funds Encouraged By Decline In Podemos Support

4 November 2015 – El Confidencial

An air of tranquillity has returned to the offices of the large international funds following the uncertainty that was unleashed on 24 May. Then, the success of groups linked to Podemos in the municipal elections caused many institutional investors to rethink their positions in our country, they slammed on the brakes and chose to move cautiously, as they awaited developments.

This attitude affected the rhythm of several sectors that were enjoying a real boom at the time, including the real estate sector, where large buyers were responsible for driving the recovery. The electoral calendar meant that they had no choice, with the upcoming regional elections in Cataluña (which Junts Pel Sí was trying to hijack as a referendum on independence) and the general elections scheduled for the end of the year, the second half of the year was set to be very quiet. But the latest election polls are changing everything.

The decline of the group led by Pablo Iglesias and the growing expectations surrounding the alliance between PP and Ciudadanos has given the large international funds reason for hope. The results of the opinion polls are showing them that our country’s politics will continue in line with the reforms undertaken in recent years and, above all, that it will not fall into the hands of a leftist coalition involving a Government seeking to resemble the Greek Syriza party.

As one source in the sector explains “now that Podemos is becoming weaker, our concern regarding the country’s political risk has decreased siginficantly – any scenario involving stability is welcome. In other words, the change in the perspective of the international funds has not been driven so much by the rise of PP-Ciudadanos, but rather because the decline in support for Podemos significantly reduces the risk of instability”.

In fact, to say that overseas investors have a preference for one party or another is, in the opinion of the professionals in the sector, completely incorrect. “Investors are not saying ‘I want this party or that party to win’, overseas investment in real estate has been the same under the PSOE and the PP. The good news now is that Ciudadanos is no longer regarded as a risk”.

Several investors specialising in the real estate sector acknowledge that this change of perspective is being felt by the day, a domino effect that has been accelerating with the wave of polls in recent weeks, all of which are marked by the common denominator of the decline of Podemos with respect to the rising trend that started with the European elections and peaked with the municipal elections, and the consolidation of Ciudadanos as the great emerging force.

Tensions continue in Cataluña

(…). The only exception to this rule is Cataluña, “where the separatist tensions mean that there is a great deal of uncertainty”, says one M&A expert. “I have decided to delay any decisions until next year, it only means waiting a few more months. What difference does that make?”.

Just as there is a general feeling of calm amongst the large international investors regarding Spain in general, their views regarding the future of Cataluña are divided. Many are convinced that independence is a utopia that will never actually happen, but there are others that regard it as a credible option, in which case they prefer to wait and see.

The direct consequence of these fears, besides the delay in terms of closing operations, is the downward pressure on the prices of those operations already underway. Similarly, the return of confidence is a revulsive in favour of the vendors, which still have almost two months to reach agreements (before year-end), but now with the factor of economic stability in their favour. Provided that is, that the opinion polls are correct.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Podemos Targets Goldman in Spain, EU Insurgents Attack

20 January 2015 – Bloomberg

The anti-austerity party Podemos, leading Spanish polls less than a year before the next election, is targeting Goldman Sachs Group Inc. (GS)’s purchase of social housing in Madrid, saying it’s a predatory type of investment that should be stamped out.

Podemos is highlighting transactions such as Goldman’s 201 million-euro ($234 million) acquisition of rent-protected apartments as it works out policies to reduce inequality in Spain and draw millions of unemployed workers back into the labor force after a seven-year slump.

“They know that at a certain point the protected rents will expire, and when that happens, they will throw the tenants out,” Juan Carlos Monedero, a member of Podemos’s executive committee, said in an interview. “They are enriching people who already have more money than they know what to do with, and in turn they are forcing people to live on the streets.”

Governments across the European periphery are braced for an assault by anti-establishment parties channeling voters’ anger at the budget cuts their official creditors demanded in return for financial support. Greek Prime Minister Antonis Samaras is first up, trailing the main opposition party Syriza ahead of this weekend’s general election. His Spanish counterpart Mariano Rajoy has to call a vote around the end of the year.

Naked Calendars

Podemos has led in most opinion polls since November. The party had the backing of 28.2 percent of voters compared with 19.2 percent for Rajoy’s People’s Party, in a Metroscopia poll of 1,000 people conducted Jan. 7 and 8 for El Pais newspaper. A separate poll for the ABC newspaper published Jan. 18 gave Rajoy 29.3 percent and Podemos 21.1 percent.

Goldman Sachs and its junior partner Azora purchased 3,000 apartments that the Madrid regional government had set aside for low income families in August 2013. Blackstone Group LP (BX), the world’s largest alternative-asset manager, and its partner Magic Real Estate bought a similar portfolio from the city of Madrid in July 2013 for 128.5 million euros.

A group of tenants from the blocks bought by Blackstone created an association to fight the terms of the sale, which saw them lose the chance to buy their homes after ten years, according to Arantxa Mejias, the head of the group. To help finance its activities the association produced a calendar featuring nude pictures of the families living in the buildings.

Goldman’s London-based spokeswoman Fiona Laffan declined to comment when contacted by Bloomberg. Andrew Dowler, a spokesman for Blackstone in London, also declined to comment.

Podemos’s Plans

In economic terms, Goldman and Blackstone’s investments proved prescient. Spain emerged from recession in the third quarter of 2013 and the property market began to pick up a year later. Yet the investors may still not be able to escape the fallout from the financial crisis.

With unemployment at 24 percent, more than double the European Union average, Podemos is luring voters by promising to re-engineer the Spanish economy to give opportunities to those who’ve been marginalized by the crisis. Leader Pablo Iglesias plans to increase public investment and reject the demands for austerity which forced officials to sell off assets such as public housing.

Iglesias will visit Greece this week to support his ally, Syriza leader Alexis Tsipras, in the final days of his general election campaign. Iglesias is aiming to use a Syriza victory in Greece as a stepping stone to help him claim power in Spain.

Should he achieve that, a Podemos government would promote a debate about the ethics of Goldman’s real estate investment.

“I don’t care whether that’s legal,” Monedero said. “We still have to discuss it.”

Original story: Bloomberg (by Esteban Duarte)

Edited by: Carmel Drake