Tax changes requested in REITs
Large FDI providers in real estate have approached the finance ministry seeking tax changes to the current framework for Indian real estate investment trusts (REITs). The recently unveiled structure reduces cash in the hands of shareholders by almost one-fifth compared to a listing in Singapore, they told the government officials in recent meetings.
REITs allow investors to own shares in rent yielding real estate assets that are listed on the bourses. These investment trusts are touted as being potential game changers for the realty and infrastructure sectors, which are facing liquidity pressures. But the current tax heavy framework could see some of India’s largest commercial assets owners like Embassy Office Parks, RMZ Offices and K Raheja Corp veering towards a listing in Singapore.
Global pension funds, sovereign wealth managers, and private equity houses like Canadian Investment Pension Plan, Qatar Investment Authority and Blackstone are prolific backers of Indian commercial assets.
The FDI personnel in the real estate business have gone to the ministry of finance so that a tax change can be gained in the present framework of the REITs.
Source: The Times of India
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