Tuesday, July 27, 2010

Philippines matured for real estate venture expectations – professionals

A bill surrendering tax perks to REIT firms, which will puddle in-come generating property possessions and hoist money by listing on the stock exchange, lapsed into law last December but has up till now to be implemented because REIT tax rules have yet to be cleared by the Bureau of Internal Revenue.

Mr. Sebastian said the lack of original public offering in the local bourse should persuade investors to put money in REIT companies. "Unless we augment the stocks, the traded volume will linger inadequate. REITs will be the IPOs that the Philippine Stock Exchange can anticipate to increase its business."

Property giants have uttered awareness in acquiring funds through the fresh venture vehicle. SM Prime Holdings, Inc., the country ’s largest mall operator, is looking to raise as much as $600 million through a REIT, while Ayala Land, Incdesires to raise a minimum $300 million.
One of the tax benefits to be enjoyed by REITs is a 50% discount on documentary stamps for the transfer of real property to REIT companies. The law also excepted from tax any initial public offering and secondary offering of securities.

The Finance department estimates the REIT law to result in P2.7 billion in proceeds losses annually.

Mr. Purisima said the government was also looking at focusing on estate tax collections to shore up revenues. He noted that there are about 400,000 deaths recorded per year, but estate tax collections amount to only less than a billion each year. The government aims to assemble a total of P1.29 trillion in revenues this year.

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