The lower house of parliament in the Netherlands has backed a proposal to allow tax-friendly property vehicles FBIs develop for their own account. FBI’s are the Dutch equivalent of a real estate investment trust (REIT). Under the legislation, which still has to be approved by the Dutch senate, FBIs would be permitted to set up a taxable subsidiary to carry out redevelopment. As long as the work relates to less than 30% of the taxable value of a property, tax is not incurred.
The lower house of parliament in the Netherlands has backed a proposal to allow tax-friendly property vehicles FBIs develop for their own account. FBI’s are the Dutch equivalent of a real estate investment trust (REIT). Under the legislation, which still has to be approved by the Dutch senate, FBIs would be permitted to set up a taxable subsidiary to carry out redevelopment. As long as the work relates to less than 30% of the taxable value of a property, tax is not incurred.
Researchers at merchant bank Kempen & Co noted in a report in November last year that the change would not have a substantial impact on profitability for the Dutch listed property companies. 'Only Corio and Rodamco Europe have indicated that they intended to carry out development for their own account. Both Corio and Rodamco Europe have substantial development pipelines in the Netherlands, but the vast majority of these projects already have third-party developers,' Kempen & Co said.