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Indirect investment in the real estate sector

The real estate sector has been part of the business DNA in Spain. This sector includes the set of operations

The real estate sector has been part of the business DNA in Spain. This sector includes the set of operations that are given in supply and demand operations between real estate. Depending on the type of asset, we will talk about residential, hotel, commercial, industrial or soil transactions, among others.

How to invest in the real estate sector

  • Rooting Direct Acquisition Funds
  • Loans for the purchase of real estate assets
  • The acquisition of real estate investment actions, for example, investment in real estate derivatives.

real estate investment can be understood taking into account its three levels of complexity:

  • The basic level. This has to do with direct investment assets and mortgage financing. This option, which is the most traditional, is characterized by having liquidity restrictions.
  • The intermediate level. This level has greater complexity than the previous one and has to do with the financing of mortgage bonds and indirect investment. At this level we find Socimi. This level improves aspects such as initial investment costs and direct investment transactions.
  • The advanced level: this is the highest level of complexity, where real underlying underlying and instruments are combined.

The selection of the most appropriate level depends on the objectives of the investor or the company. Before opting for a specific level it is necessary to analyze the advantages and disadvantages of the different products and positions depending on the convenience of the company’s portfolio.

In the case of the SOCIMI, its financial resources give advantages that help improve the hope of profitability-risgo of investment portfolios.

definition of socimi

A socimi is a type of societies that can participate in real estate management (rent or sale of properties), invest in other real estate companies, and even participate in the financing of the properties that stand out above all to the be more liquid than other alternative investment instruments.

The constitution of this type of company, unlike other collective investment vehicles, does not require prior administrative authorization of the National Securities Market Commission (CNMV), but all of them must meet a series of requirements and are subject to a special tax regime. The actors involved in the value chain of a socimi are: the managing company, the tenants and the investors.

The main characteristics of the socimi are:

  • It is a corporation, its minimum capital is 15 million euros and the legal reserve will be 20% of the share capital, in the majority, 80% of the value of the company’s assets must be invested in urban properties.
  • 80% of the income during the year must come from a property.
  • The maximum external financing limit is 70%
  • In reference to the diversification of investments, a minimum of 3 properties is established as long as none of them represent more than 40% of the total assets.
  • As a general rule, the minimum maintenance period of a leased asset is 3 years; However, he can reach 7 years in the case of buildings, sponsored by society.

General Taxation System of Socimi

The main characteristics of the general taxes of the Socimi are described below, distinguishing between the taxation of the company and its partners:

  • The socimi taxes 18% on the distributed benefits and, in case the housing lease contract exceeds 50% of the assets, the 20% exemption is applied
  • Deduction for the reinvestment of capital gains generated in the dividend distributed to 6%
  • The tax can be compensated before the conversion of the company into a socimi
  • They have tax exemptions in corporate operations

cover in more detail what a socimi is required greater depth a more exhaustive analysis of each specific case, so, if you are thinking of any operation of this style, we suggest that you better contact us in and we can offer you our vision about it.

125 Anniversary Aguas de Valencia.

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