SECP amends REIT rules to introduce P3 model

The Securities and Exchange Commission of Pakistan (SECP) on Tuesday notified amendments to the Real Estate Investment Trusts (REIT) regulations to promote infrastructure development with the introduction of a new Public-Private Partnership (P3) model being the most important update.

The revised framework has made clear segregation between conventional and infrastructure categories. Non-P3 REIT is for conventional projects while P3 REIT is for infrastructure projects under the public-private partnership model.

The amendments have relaxed laws related to real estate developments and promote investment through REIT companies.

The SECP has also proposed to the Federal Board of Revenue (FBR) that the tax on dividends of REIT share be reduced from 25 per cent to 15pc, which was also the tax rate for dividends of mutual funds.

Furthermore, the SECP has also requested the FBR to extend the exemptions on capital gains tax on property transferred to REIT scheme up to 2023, the exemption is set to expire this year.

 

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