New taxation rules that would damage the competitiveness of France's real estate investment trust industry will no longer be implemented, according to Dorian Kelberg, general director of French industry body FSIF.
New taxation rules that would damage the competitiveness of France's real estate investment trust industry will no longer be implemented, according to Dorian Kelberg, general director of French industry body FSIF.
Kelberg confirmed that the changes to the regime have been dropped by the parliamentary opposition and will not be backed by the government either. 'The amendments envisaging a substantial modification of the SIIC regime have been proposed by the parliamentary opposition and not by the government. The FSIF has thus met with these parliamentarians to discuss the subject and they have agreed to withdraw this amendment,' Kelberg said.
The statement follows EPRA CEO Philip Charls' speech at the SIMI property fair in Paris that the proposed measures would hamper the attractiveness of French SIICs, in particular for foreign investors. They include a lower threshold of foreign ownership in SIICs whereby international investors are required to pay withholding tax on dividends at source.
'The French government never intended to substantially alter the SIIC regime. It has simply rectified two fiscal advantages that seemed unjustified,' Kelberg noted. The tax advantages being abolished are the tax break for individual investors who hold shares in SIICs within their PEA pension plans (Plan d'Epargne en Actions). However, Kelberg added, SIIC stock already held under the PEA allotment will be excluded from the new veto.
'This amendment puts an end to a situation in which SIICs were the sole companies exonerated from income tax under the PEA,' Kelberg said.
Since the introduction of the French SIIC in 2003, the total market capitalisation of the French listed sector has grown to just over EUR 50 bn from little more than EUR 10 bn. This makes it the largest contributor to the expansion of the entire European listed real estate sector over this period. Currently the French listed sector accounts for 25% of the FTSE EPRA/NAREIT Europe Index and is second only in size to the UK.
