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BERLIN-Still working out the details prior to their introduction, the German government has decided to exclude residential property from REITs. The finance ministry said residential property would be removed from a draft bill on REITs to be presented to the cabinet next month.

The fine details of the bill have yet to be finalized, said a finance ministry official Thursday, but he added that existing residential housing stock would definitely be excluded. Whether mixed-use buildings comprising commercial and residential as well as new residential developments would also be excluded has yet to be decided.

The German government had planned to introduce REITs on Jan. 1--to coincide with similar legislation being introduced in the UK--but political in-fighting between the partners in Germany's coalition government is threatening to delay the process. On Thursday, a finance ministry official said the bill could be presented to parliament in early January. The changes to the draft were triggered by pressure from the social democrats who fear rising house prices could leave some Germans unable to enter the property market.