The Spanish REIT regime (so-called SOCIMI) was introduced in October 2009. A SOCIMI is subject to a corporate income taxation of 19% as opposed to the standard REIT exemption or 0% rate applicable to other REIT vehicles. The combination of global financial turmoil, economic downturn, the state of the Spanish real estate market and the stringent requirements to join the regime have contributed to a low level of take up so far, similar to other jurisdictions which joined the REIT club late.
In May 2012, the Spanish Ministry of Finance published a first draft bill with amendments to the current SOCIMI legislation in order to make the regime more attractive. Furthermore, the Ministry is now proposing additional amendments to the draft bill, including a major one which would change the structural design of the SOCIMI bringing the corporate income tax rate down from 19% to 0%. This Newsalert briefly summarises the amendments as proposed by the Spanish Ministry of Finance.