The regime finally received the green light and was approved by the specialised committee, and it includes two changes presented by PS (Portuguese Socialist Party) with the right wing’s support, which clarify the SIGI’s goal and focus its activity on rental.
The members of Parliament approved a change concerning the social object, which now states that the SIGIs main function is to «acquire property, surface and other similar rights over real estate goods, with the purpose of renting, covering atypical contractual arrangements which include the provision of services necessary for the use of the building», quotes Expresso.
It is further clarified that, despite the SIGIs following the same tax regime as investment funds, they will benefit from the same tax exemptions, as added value, only when «the buildings have been purchased with the purpose of renting or other atypical contractual forms which include the provision of services necessary for the use of the building, for at least three years».
Two proposals from PSD (Portuguese Social Democratic Party) were also approved, namely the requirement that the SIGIs perform an assessment of their assets every 7 years through an independent audit and the requirement that at least 25% of their capital should be in stock 5 years after going public.
In this way, the proposals presented by PCP (Portuguese Communist Party) and BE (Bloco de Esquerda - Left Block Party) to revoke this regime were dismissed.
Paulo Núncio, partner at law firm ML Advogados and ex-secretary of State for Tax Affairs within the former government, commented to VI that «the approval of the SIGI regime by the Parliament, with the support of such an overwhelming majority, represents a significant effort in terms of competitiveness within the real estate sector. And it corresponds to the definitive completion of a project that took its first steps in 2015 and which provides Portugal with the best international practices in terms of attracting foreign savings and investment ».
The diploma’s final vote, scheduled for this Friday, is to follow.
“An important step” to attract investment
The Portuguese Association of Real Estate Developers and Investors – Associação Portuguesa de Promotores e Investidores Imobiliários – has already commented this approval, noting that «an important step was taken, by our country and in particular by our Parliament, to attract more and better investment».
In a statement sent to VI, APPII mentions that «today Portugal sent a relevant message to the international market stating that it is apt and willing to receive new investors, which until now would not have entered the Portuguese market, on behalf of increasing the offer (so needed) on all market segments. The scarcity of assets and the real estate prices’ increase can only be fixed by increasing the offer».
He also reminds that the Real Estate Investment Trusts model is «a proven case of success» in other countries, representing «a standardized and internationally accepted form of investment». Developers believe that «Portugal would have lost competitiveness in attracting investment if it hadn’t quickly established a legal regime such as the recently approved SIGI regime».