How REIT Listings Have Been Made Easier In India

REIT or Real Estate Investment Trust is an organisation that operates or funds properties that offer high income benefits for real estate investors. REITs handle all kinds of properties, be it commercial or residential, and are modeled on the lines of mutual funds.

The latest Union Budget for the 2015-16 fiscal year has been a boon in disguise for the Indian real estate sector. Particularly for REITs. Read on to know why.

No Capital Gain Taxes

In an earlier set up, an investor had to wait for at least three years to claim tax exemptions on long-term capital gains, which acted like a thorn and made REIT an unviable option. But with the removal of these taxes, REITs have become more viable for investors than ever before.

Investor Exit Is Now Easy

Most of the times, the funds available get stuck in projects that are already completed. This makes it hard for the investors to invest in other ventures. But that has been rationalized, making the investor exit much smoother. Now, all they have to do is to pay the Standard Transaction Tax (STT), and be on their way.

Commercial Properties Can Be Listed On REITs

This is another process by which the REIT listings have been streamlined for the better. The new guideline allows commercial properties to enlist in REITs, which gives builders the access to raise cheaper capital. This will also provide the retail investors with an opportunity to keep themselves more active in the real estate market.

NRI Investments Made Simpler

With the Finance Minister vouching for equal treatments for REITs and other such equity share entities, enlisting of REITs worth over 1 lakh crores in the stock exchange has become much simpler. This major move is a game changer as it has the potential to garner more NRI investors into the Indian real estate scene.

REITs Are Not Always Liable For Tax

REITs are enjoying a lot more freedom with the outcome of the Union Budget. Basically, REITs are not held responsible for the taxes if they have offloaded the shares to a different entity. All the rental income generated by the property will reach the REIT, but the unit holders are still responsible for the taxes.

Overall, the central government has taken the best steps forward to improve the stagnating state of the real estate market in India. With these reforms regarding the REITs, end users and the real estate market will benefit.

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