In recent months, investment companies in Real Estate in collaboration with Capital Market Commission and Association of Institutional Investors. According to information, the text of the proposals is now on its way to completion, so that the consultation with the government, which will be asked to legislate, can then proceed. The existing institutional framework for the industry AEEAP it dates back to 1999, while in the course of the intervening years a series of modifications and interventions were carried out, both of a developmental and fiscal nature, with the result that today it is considered particularly restrictive and dysfunctional.
In this context, companies in the sector are looking for ways to improve their operating and taxation framework, which reflects today’s reality, offers the possibility of further development of the sector and at the same time gives the required tax incentiveswhich over the years and especially during the economic crisis were significantly reduced.
As he explains in “K” Mr. Konstantinos Markazos, managing director of Premia Properties AEEAP, “the current context is not particularly favorable from a tax perspective. For example, while the original law makes explicit reference to the abolition of all real estate tax for AEEAPs, nevertheless, following the changes of previous years, companies not only normally pay the full LIGHT and the additional tax, but in addition they cannot secure any discount, e.g. through offsetting with expenses. Also, they can’t even move on to depreciation, like a joint-stock company”, he emphasizes characteristically. Thus, among the changes requested is the reduction of the supplementary ENFIA by 50%.
Among the changes requested is a reduction of the supplementary ENFIA by 50%.
In addition, it is requested to change the way it is calculated asset tax, which has quintupled in the last year due to being linked (since 2007) to the ECB’s base rate (Euribor), which has risen significantly. Thus, it is proposed to establish a minimum and maximum rate in order to limit the variability of this tax and make it less dependent on monetary policy changes.
At the same time, the companies in the sector are also asking for a series of changes in the way they operate and in the restrictions that have been imposed on them. For example, it is requested that there be no restriction that they cannot invest more than 25% of their assets in residential properties or respectively that the 10% ceiling does not apply to the use of financial leasing (leasing).
Another important change concerns the way the legislator handles the hotel properties. For example, today the companies in the sector cannot themselves operate the properties of a tourist nature that they have in their portfolio. Thus, they are obliged to grant them to a third party, who also assumes the role of user/operator of the hotel properties.
As Mr. Markazos mentions, “the institutional framework that exists today was created with the initial goal of serving the banks, which were also the first to operate real estate investment companies. Today it needs to be modernized to meet the real needs of the sector and to offer the possibility for new investments. For example, asset taxation concerns even liquid assets, while even capital increases are charged with a special tax.” Another element that needs to be changed is the positioning photovoltaics on the roofs of existing buildings, which is also not allowed under the existing institutional framework.
