PSE seeks incentives for real estate invest funds

In line with efforts to broaden the products available to the investing public and keep the Philippine market abreast with global trends, the Philippine Stock Exchange (PSE) is seeking the passage of a law that will give special fiscal incentives to those who will invest in real estate investment funds (REIFs).

While envisioned to parallel the Real Estate Investment Trusts (REITs) in Japan, US and Singapore, the proposed REIFs however, lacks the fiscal incentives found in such REITs, the PSE said.

Nevertheless, the introduction is envisioned to serve as the foundation for the passage of an enabling law by Congress.

REIF is conceptualized as an investment vehicle formed for the specific purpose of owning, operating or managing developed real estate assets and real estate related securities.

A greater portion of the income generated from these assets will be required to be distributed to the investors of the investment vehicle in the form of dividends, which is taxed at lower rates than ordinary income.

Investors will receive investment certificates (equivalent to stock certificates) that can be traded through the exchange similar to listed equities.

Pending the legislation of an enabling act, the REIF, as a close-ended mutual fund, shall be regulated under the provisions of the Investment Company Act (RA No. 2629).

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