SEC Commissioner Ephyro Luis Amatong said the agency expects to issue the final implementing rules and regulations for the real estate investment trust (REIT) Act within the first half of the year. He said the SEC may also try to issue the final IRR within the first quarter.
Many property developers are now anticipating the final IRR to identify if their companies’ participation in the REIT would be viable. Among these companies are Megaworld Corp., Ayala Land Inc., Robinsons Land Corp., and DoubleDragon Properties Corp.
Similarly, fund managers in managing the capital that would be recycled from the REIT are already seeking the approval of the SEC.
The REIT Act, which was passed by Congress in 2009, was deemed instrumental in generating more investments, especially for real estate companies.
However, the implementation was stalled since 2009 because of tight taxation framework. Because of this, none of the major property developers with their prospective offerings amid issues on ownership and taxation on asset transfers.
For instance, the government subjected the transfer of assets into REITs to taxation and slapped a 12 percent rate on additional income generated.
It also set the minimum public ownership of such trusts at 40 percent for the first two years of their listing and 67 percent thereafter.
The SEC under the Duterte administration agreed to cut REIT’s minimum public ownership to 33 percent. The Bureau of Internal Revenue also clarified that the initial transfers of property to REITs are exempt from VAT as provided by Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion Act.
Ramon Monzon, CEO and President of the Philippine Stock Exchange expressed his optimism that REIT listings would soon proliferate as the government has already resolved major roadblocks to the REIT implementation. For his part, PSE Chairman Jose Pardo said REIT listings would help improve market liquidity.
Source: Philippine Star
