Thursday, April 16, 2009 [ manilatimes.net ]
A HOUSE committee on Wednesday approved a measure that paves the way for foreign ownership in the property sector through the financial instrument called real-estate investment trusts (REITs).
The House Committee on Economic Affairs forwarded for plenary deliberations the bill, which will also help the government build infrastructure and democratize land ownership, according to its proponents.
Rep. Abraham Kahlil Mitra of Palawan, co-author of the bill, said overseas Filipinos who invest in a Real Estate Investment Co. in any taxable year shall be entitled to a tax credit of 5 percent of the amount of total direct investments not exceeding P50,000 per year for purposes of tax credit.
“This incentive will encourage these unsung heroes to save for the future of their families and in the process, aid in the growth and development of the capital market and the nation’s economy,” the legislator said.
Rep. Juan Edgardo Angara of Aurora said the main purpose of real-estate investment is to provide small and large investors alike with the opportunity to participate directly in the ownership and financing of large scale real-estate projects at affordable rates, without the disadvantages of illiquidity, high transaction and managements costs, as against traditional private real estate ownership.
“Since the stocks of real-estate investment trusts should be listed in the Philippine Stock Exchange, it is easier to buy and sell the securities of said companies representing an interest in income-producing real estate than to directly buy and sell the properties themselves,” the lawmaker said.
Among the provisions of the bill are the exemption of REITs from the documentary stamp tax, adoption of a 5-percent cap on tax credits, the retention of the right of the Securities and Exchange Commission to issue special authority to the REIT to invest.
Other authors of the bill are Reps. Paul Daza of Northern Samar, Hermilando Mandanas of Batangas, Ramon “Red” Durano 4th of Cebu, Edno Joson of Nueva Ecija, Roman Romulo of Pasig City and Carlos Padilla of Nueva Vizcaya.
--Frank Lloyd Tiongson and Maria Katherine Bautista