What does the SOCIMI income test require?

What does the SOCIMI income test require?

• A. At least 70% of income from property sales
• B. At least 50% of income from interest on loans
• C. At least 80% of income from leases or dividends
• D. At least 60% of income from capital gains

Answer: (C)

The SOCIMI income test requires that at least 80% of the income generated by the entity comes from leases or dividends. SOCIMIs (Sociedades Anónimas Cotizadas de Inversión en el Mercado Inmobiliario) are a type of Spanish real estate investment trust which have specific guidelines to ensure they mainly focus on rental income from managing properties or deriving income from dividends of other real estate companies. By mandating that a significant majority of income must come from these sources, the SOCIMI framework is designed to promote long-term investment in real estate and support stable rental income streams, reflecting a more traditional and secure investment model. This requirement aligns with the overarching goals of SOCIMIs, which aim to provide a taxation regime that incentivizes investment in the housing and rental markets. In contrast, the other options do not accurately reflect this requirement. Each focuses on different income sources that do not satisfy the specific guidelines set out for SOCIMIs.

The SOCIMI income test requires that at least 80% of the income generated by the entity comes from leases or dividends. SOCIMIs (Sociedades Anónimas Cotizadas de Inversión en el Mercado Inmobiliario) are a type of Spanish real estate investment trust which have specific guidelines to ensure they mainly focus on rental income from managing properties or deriving income from dividends of other real estate companies.

By mandating that a significant majority of income must come from these sources, the SOCIMI framework is designed to promote long-term investment in real estate and support stable rental income streams, reflecting a more traditional and secure investment model. This requirement aligns with the overarching goals of SOCIMIs, which aim to provide a taxation regime that incentivizes investment in the housing and rental markets.

In contrast, the other options do not accurately reflect this requirement. Each focuses on different income sources that do not satisfy the specific guidelines set out for SOCIMIs.