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Real Estate Investment Trusts

Dáil Éireann Debate, Wednesday - 16 October 2019

Wednesday, 16 October 2019

Questions (91)

Pearse Doherty

Question:

91. Deputy Pearse Doherty asked the Minister for Finance if the recent move to close the revaluation loophole upon REIT cessation, section 705P requiring that the relevant REIT has to be in operation for over 15 years before it gets this preferential treatment, will be applicable to the sale of Green REIT to a company (details supplied). [42515/19]

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Written answers

Finance Act 2013 introduced the regime for the operation of Real Estate Investment Trusts (REITs) in Ireland. The function of the REIT framework is not to provide an overall tax exemption but rather to facilitate collective investment in rental property by removing a double layer of taxation which would otherwise apply on property investment via a corporate vehicle.

A number of amendments were introduced to the REIT framework via Financial Resolution on Budget night. The purpose of these amendments is to ensure that the appropriate level of tax is being collected.

One such amendment corrects an unintended anomaly in legislation, whereby a distribution comprised of the proceeds of a property disposal was not subject to dividend withholding tax.

In addition, an existing provision whereby a deemed disposal and re-basing of property values occurs should a company cease to be a REIT has been limited to apply only where the REIT has been in operation for a minimum of 15 years.  This is in line with the original policy intention of encouraging stable long-term investment in the rental property market.

In relation to the further details supplied, as the Deputy is aware, I am not at liberty, nor is it appropriate for me, to discuss the tax affairs of individual companies.

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