French Senate Adopts Property Fund Tax Changes

PARIS-The French Senate just prior to year-end adopted two measures which change the tax framework of non-listed real estate funds, allowing closer cooperation with bourse-listed counterparts REIT/SIICs.

The first of the measures, which take the form of amendments to the 2009 French budget law, is aimed at facilitating the creation of partnerships between listed real estate investment trusts (SIICs – Société d’Investissements Immobiliers Cotée) and OPCI non-listed open-end funds (Organismes de Placement Collectif Immobilier).

Jointly held subsidiaries are entitled to opt for the tax treatment applied to SIICs, which are exempted from corporation tax providing they distribute a high percentage of income as dividends to investors.Laurent Modave, of lawyers Gide Loyrette Nouel, said the change allows a SIIC to transfer property assets to a subsidiary in which it and a non-listed fund together hold at least 95%.