Today I would like to make some comments about a new economic aid granted to the Spanish Banks and Cajas de Ahorros. But due to its technical complexity it isn´t displayed on the TV or Radio News.
Last October the 27th the Oficial Bulletin of the Stated published Law 11/2009 that created the Sociedades Anóminas Cotizadas de Inversión en el Mercado Inmobiliario (SOCIMI) that are the Spanish version of the REITS (Real Estate Investment Trusts)
It is not said throughout the Law, but it is quite obvious that are societies that can only be set up by financial entities, (banks or cajas) as its minimum capital share has to be 15 million euros and they have to be quoted at stock exchange markets, so not everyone can set up one.
The initial purpose Government had to set up this regulation is a good idea regarding social justice, and as way to avoid eviction of many families that cannot afford the quotes of the their mortgages, but when you get into the details of the regulations you get to a clear conclusion: WHEN I GROW UP I WANT TO BE A BANK.
80% of their assets have to be real estate goods subjected to rental, and under some conditions you can arrange a rental with purchase option at the end of the rental period, (and these rental will be taxed with 7% VAT instead of 16%) And as I said, this is a good idea. It is a way for the banks to release from the huge real estate heritage they have accrued these years of crisis and a way people can stay in their homes, instead of paying mortgage quotes, paying a rental and avoiding eviction.
The points I don´t understand (or maybe I understand them too much) are the following ones:
1.) The profits of theses societies set up by banks will only be taxed with a 18% instead of the 25-30% the rest of the societies are taxed. Why? Well, maybe because of the social justice we try to provide with theses societies, but I am not sure.
2.) The members of these new companies that are private people will have to receive (in case there are profits) dividends every year and theses dividends will be TAX FREE 100% with no limit of any kind.!!!!!!!!!!!!!! Where is the social justice here????????????????????
So this is the point where I think: When I grow up I want to be a bank.
Thru the period of fat cows, with cheap money I have made huge benefits lending money for mortgages. Now, we come to bad time and I find myself with a whole stock of properties the owner cannot afford to pay for the mortgage quotes, but don´t worry, I will have my Government to put me down the VAT of the rentals with purchase option from 16% to 7% or 4%. This very same Government will make me a regulation where companies I can only set up will tribute 12 points less than the rest of the companies and in case that at some point a I need external financing no problem, I will make to my clients an offer they won´t be able to reject because I will offer them shares of these companies with dividends 100% free of any tax.
I insist. MOM, DAD, WHEN I GROW UP I WANT TO BE A BANK.