What is the SOCIMI asset test requirement?

What is the SOCIMI asset test requirement?

• A. At least 50% of assets must be commercial property
• B. At least 80% of assets must qualify as real estate
• C. At least 75% of assets must generate income
• D. All assets must be located within Spain

Answer: (B)

The SOCIMI asset test requirement specifies that at least 80% of the assets held by a SOCIMI (a Spanish REIT) must qualify as real estate. This definition of qualifying assets is fundamental to the operation of SOCIMIs, which are designed to promote investment in the real estate sector while benefiting from a favorable tax regime. This requirement ensures that the majority of the investment portfolio is allocated to real estate properties, which can range from residential to commercial properties, and includes both direct investments in real estate as well as holdings in entities that are primarily engaged in the management of real estate assets. By establishing this threshold, the Spanish government aims to maintain the integrity of the SOCIMI structure as a specialized vehicle for real estate investment. The other options do not accurately reflect the primary requirement for SOCIMI asset composition. For example, while generating income is important for any real estate investment, the 75% minimum requirement for income generation is not specifically stated as a part of the asset test; rather, it pertains to other operational regulations. Additionally, the requirement that all assets be located within Spain or that a specific percentage of the assets must be commercial property does not align with the SOCIMI requirements as they focus on the overarching need

The SOCIMI asset test requirement specifies that at least 80% of the assets held by a SOCIMI (a Spanish REIT) must qualify as real estate. This definition of qualifying assets is fundamental to the operation of SOCIMIs, which are designed to promote investment in the real estate sector while benefiting from a favorable tax regime.

This requirement ensures that the majority of the investment portfolio is allocated to real estate properties, which can range from residential to commercial properties, and includes both direct investments in real estate as well as holdings in entities that are primarily engaged in the management of real estate assets. By establishing this threshold, the Spanish government aims to maintain the integrity of the SOCIMI structure as a specialized vehicle for real estate investment.

The other options do not accurately reflect the primary requirement for SOCIMI asset composition. For example, while generating income is important for any real estate investment, the 75% minimum requirement for income generation is not specifically stated as a part of the asset test; rather, it pertains to other operational regulations. Additionally, the requirement that all assets be located within Spain or that a specific percentage of the assets must be commercial property does not align with the SOCIMI requirements as they focus on the overarching need