Portuguese government to allow REITs

Portuguese government to allow REITs
The Portuguese government will present a proposal by the end of the year for the creation of Real Estate Investment Funds (REITS).
The announcement was made on Tuesday at the first day of the Portugal Real Estate Summit in Estoril by the Minister to the Prime Minister, Pedro Siza Vieira.
The Portuguese real estate sector has been lobbying for over 10 years for the introduction of real estate investment trusts which are commonplace in neighbouring Spain. The objective of the move is to bolster property product supply for the long-term rental market.
“These are trust companies that will be listed and designed to attract savings which can then be invested in properties for long-term rental” said the minister at the summit held at the Palácio Hotel in Estoril.
These trusts will only be able to hold properties which must be held in portfolio long term and must be earmarked for rental. This doesn’t currently exist in Portugal” said Pedro Siza Vieira.
These investment vehicles are new to Portugal but have been used in Spain for some time where they are referred to as SOCIMI.
In order for REITs to be applied in Portugal a tax and regulatory regime must be put in place which the Portuguese government intends to do by the end of 2018.
A real estate investment trust or REIT is a company that owns, operates or finances income-producing real estate. For a company to qualify as a REIT, it must meet certain regulatory guidelines.
REITs often trade on major stock exchanges like other securities and provide investors with a liquid stake in real estate.