Malaga Law Solicitors

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news
	Bank of Spain proposes doubling provisions for repossessed properties Proposed changes will drive property prices down

	Gloomy report on Spanish property market No recovery until 2016

	Latest financial scandal Landsbanki mis-selling of equity release schemes

	Repossession cases on the increase Repossession cases heard by Marbella

guides
	Spanish NIE numbers Applying for an NIE (Número de Identidad de Extranjero)

	Deed of dissolution of joint property ownership Re-arranging assets following divorce or separation

	Divorce or legal separation in Spain Guide to Spanish divorce or separation

	Guide to buying property in Spain Legal guide on purchasing property in Spain

	Taxation of Pension Income in Spain Spain - a favourable tax environment

published articles
	Bank and insurance guarantees Enforcing a claim under bank or insurance guarantees

	Buy with confidence Avoid the pitfalls

	Executing a power of attorney Risks involved in executing a power of attorney

	Rural property Risks involved in buying rustic or rural property

	Refinancing and equity release schemes Spain an unregulated market place

	Starting a business in Spain Pitfalls of buying a business in Spain

			REITs – Real Estate Investment Trusts
	REITs (Real Estate Investment Trusts) or as they are known in Spanish SOCIMIs (Sociedades de Inversión en el Mercado Inmobiliario) are being introduced in Spain and are expected to become law during 2009. The proposed rules governing REITS or SOCIMIs are similar to those already existing in other EU member states for this type of collective investment vehicle. Although the draft bill must pass through various parliamentary stages before it is approved the main features, as it is currently drafted, are as follows:- Objectives Its principle activity must be the acquisition and development of urban real estate assets acquired for rental purposes. It must be listed on the securities market. It must have a minimum capital of EUR15 million. Investment and net worth requirements 90% of assets must be in the form of urban real estate for rental purposes or shares or stock in other approved REITs. Minimum holding requirements (3 years in the case of property acquired for rental/lease and 7 years where the property has been developed by the REIT). Net worth must not be lower than 45% of the value of urban real estate held – implies a leverage limit of 55%. Distribution of profits At least 90% of income derived from rental and 50% of income derived from real estate sales must be distributed to members annually. Taxation The REIT or SOCIMI will pay 0% corporate income tax on taxable income arising from rental or property sales. Members will be taxed on dividends received. REITs or SOCIMIs are aimed at putting life back into the stricken real estate market which has dropped off by more than 40% in the last 12 months and will offer a valuable channel for Spanish banks to sell off the billions of euros of property they are accumulating as a consequence of Spain’s distressed property market. Property developers and investors say that the legislation, as it is currently drafted, is far too complex and restrictive and will therefore be of little benefit and are lobbying for the removal of limits on investments, distribution of profits and levels of debt. It remains to be seen whether REITs or SOCIMIs will throw a lifeline to the almost crippled Spanish real estate sector.

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