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Saturday, December 20, 2008

Germany real estate investment trust

Germany is also planning to introduce German REITs (short, G-REITs) in order to create a new type of real estate investment vehicle. Government fears that failing to introduce REITs in Germany would result in a significant loss of investment capital to other countries. Nonetheless there still is political resistance to these plans, especially by the social democratic party ('SPD'). As of June 2006 the ministry of finance has announced that they still plan to introduce G-REITs in 2007. The legal details seem to adopt much of UK-REITs regulations (taxation, public listing, etc.), as far as it is possible to tell yet.

A law concerning G-REITs was enacted 1 June, 2007, and is retroactive to 1 January, 2007.

Qualification

* REITs will have to be established as a corporation "REIT-AG" or "REIT-Aktiengesellschaft".
* At least 75% of its assets have to be invested in real-estate.
* At least 75% of the G-REIT's gross revenues must be real-estate related.
* At least 90% of the REIT's taxable income has to be distributed to its shareholders through dividends.
* The corporation is income-tax-exempt, but the shareholders will have to pay individual income tax on the dividends.
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