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Congress mulls amendment of REIT law

The House of Representatives may push for the amendment of the Real Estate Investment Trust Act, Representative Arthur Yap said.

During the real estate market briefing of Leechiu Property Consultants, Yap said the lower house may opt to amend the REIT law and specify that the transfer of assets into REITs will be tax-free and be exempted from value-added tax.

Yap, who is also the chair for House Committee on Economic Affairs, said the REIT law would have to undergo the same process and “will have to fall in line” along with other bills in the Congress if it would amend the law.

The Republic Act No. 9856 was enacted in 2009 to encourage the investing public to invest in property projects and to further develop the capital market.

However, REIT has yet to take off in the country due to uncertainties like whether the transfer of asset should be subject to the 12-percent VAT.
    
Under the term of former Bureau of Internal Revenue Commissioner Kim Henares, her office issued a memorandum order that the transfer of asset under REIT will be slapped with VAT.