Preparatory works at technicalities of introducing REITs to the Polish market, that is companies or funds which invest in commercial properties, are currently in progress. REITs are to enable investing of even small amounts of money to both institutional and individual investors. According to the REIT Poland Association, amendments to the acts (e.g. finance acts) or special law are really needed since they will give the investors the right to be exempt from the corporate income tax.
The potential of real estate companies of the REIT type is huge. We envisage that there are at least several commercial properties in each voivodship city. These are not only offices but also warehouse areas on the peripheries of the cities. Moreover, the local government and national sector can privatize through commercialization of funds or companies of the REIT type – says Investor Mirosława Walecka-Agria of the REIT Poland Association during the talk with the news organization Newseria.
One out of five pillars of the Plan for Responsible Development devised by Deputy Premier and Ministry of Development Mateusz Morawiecki is the program of capital building. It envisages e.g. building of savings among the Poles through allowing them to invest in REITs. The program will enable the private investor to obtain profits from commercial investments such as offices or logistic centers. Moreover, they can even constitute the subject of pension fund investments since they are treated as secured. Such solutions have been applied in many other countries for years.
Such solutions as REIT have been present in some countries of the European Union as well as the United States for many years. In younger countries such as Bulgaria, however, these solutions were introduced not so long time ago. These are enterprises favored by investment and national funds, which manage the pension portfolios. We should definitely aspire to such legal solutions and to using all possibilities that are provided by REITs in Poland – says Mirosława Walecka-Agria during the talk with the news organization Newseria.
The obligations of all entities of REIT would include investing at least 70 per cent of assets in properties and reinvesting of 95 per cent of profits from sales in this sector in case of not paying it to the investors. Additionally, they would be obliged to pay out at least 80 per cent of profits by way of dividend. Therefore, they would be exempt from CIT. However, some necessary amendments have to made in acts to enable functioning of REITs.
There are two ways of regulating funds and companies of the REIT type. The first one envisages creation of special law which will totally favor REITs, and the second option is amendment of several acts, especially finance acts. What is important is that REITs should be exempt from CIT because the dividend makes that our investor pays a tax from dividends. This is how it works in the whole Europe and in the world. Just as investment funds are subjectively exempt from CIT, REITs should act the same – says the representative of the REIT Poland Association during the talk with the news organization Newseria.
Except for favoring of the accumulation of the capital, the main role of REITs on the Polish market is also stimulation of the real estate market. They should contribute to increase of share of family investors in such investments.