"Fiscal uncertainty regarding Socimis generates concern among investors in Spain."

The recent climate of uncertainty surrounding the Listed Real Estate Investment Companies (Socimis) has begun to generate concern among investors, both national and international. The possibility of an increase in taxation on these entities by the government of Pedro Sánchez and its coalition partner, Sumar, has led industry experts to warn about the consequences such a measure could have on the Spanish real estate market. In a context where it is estimated that Spain faces a deficit of half a million homes, the threat of tax changes presents itself as a factor that could further aggravate the situation. Historically, the tax regime of Socimis has been a key incentive to attract investments in the rental market. This model, which began to take shape during José Luis Rodríguez Zapatero's second term and was encouraged during Mariano Rajoy's administration, has been praised for its ability to mobilize capital towards the real estate sector. However, recent reform proposals have called its future into question, as highlighted in the FISCAL OBSERVATORY EXPANSION, where experts from the fiscal and legal fields expressed their concerns. Javier Hernández Galante, a partner at Ashurst, emphasized the high legal uncertainty created by the threat of modifications to the taxation of Socimis. Hernández stressed that the current situation is not trivial and that the consequences could be detrimental to Spain's reputation as an investment destination. He recalled the negative impact of the royal decree on renewable energies in 2012, which led to numerous legal conflicts and distrust among investors. Francisco Conde Rivas, a partner at Garrido, also warned that the reputational damage is significant. He noted that between 40% and 60% of the capital entering Socimis comes from abroad. Therefore, an increase in taxation could mean a capital flight to more investor-friendly markets. As he put it, "the more taxes, the less profitability," which could immediately lead investors to seek more favorable alternatives in other countries. Ernesto Grijalba from Bufete Barrilero y Asociados highlighted the populist backdrop that seems to motivate the attack on Socimis. He pointed out that these entities are not a refuge for wealthy individuals avoiding taxes, as has been argued. On the contrary, Socimis allow small investors to access investment opportunities in the real estate sector that would otherwise be out of their reach. In this sense, Socimis act as a mechanism for democratizing access to real estate investments. Moreover, Grijalba reminded that, despite their tax regime, Socimis fulfill significant tax obligations. They are legally required to distribute at least 80% of their profits, meaning that shareholders are taxed on those dividends in the personal income tax (IRPF). The complexity of the taxation that Socimis face should not be underestimated, as they are subject to a system that, compared to other developed countries, is more burdensome. The tax advantages of Socimis are not their only strength. Conde explained that these entities allow for the professional management of inherited assets, facilitating the integration of real estate assets that require specialized attention. This not only simplifies generational succession but also enables heirs to participate in the management of the estate, ensuring continuity in the administration of assets. However, experts agree that while the need for regulatory changes is recognized, these should not focus on increasing the tax burden. Hernández proposed that a potential reform could include a broader capitalization objective, which would facilitate the participation of small savers in the realm of real estate investment. This approach, although ambitious, could offer a more sustainable long-term solution. Grijalba, for his part, criticized the requirement to distribute a high percentage of profits, which often limits the investment capacity of Socimis. The lack of liquidity to make improvements or acquire new assets becomes a significant obstacle, which could be resolved with a review that allows more flexibility in resource management. In conclusion, the future of Socimis and their ability to attract investments in the Spanish real estate sector is at a critical juncture. With an increasing housing deficit and an uncertain regulatory environment, the option of raising taxation could have devastating effects on the investment needed to mitigate the housing crisis facing Spain. The community of investors and industry experts is awaiting decisions that could define the direction of the real estate market in the coming years, emphasizing the need for an approach that not only protects the fiscal interests of the state but also fosters an environment conducive to investment and sustainable development.