Why are real estate investment funds, known as 'vultures', targeted? It's about more than just investors...
Real estate investment funds, dubbed 'vultures', differ from small investors due to tax advantages and preferential financing.
English · Original discussion in Spanish · Published
Real estate investment funds, nicknamed 'vultures', benefit from advantageous taxation and privileged access to financing, distinguishing them from individual investors.
The individual buying an apartment to rent is not the same as an **investment fund** based in **Luxembourg** with tax advantages that escape the average citizen. This is the argumentative trap often used to equate situations that are far from similar.
## Tax Advantages and Financing
A **SOCIMI** (Spanish REIT - Real Estate Investment Trust) pays virtually **0% in corporate tax**, while an individual with two apartments pays income tax at rates of **24% to 30%**. This is not simple investment, but fiscal engineering with legal backing. Furthermore, these funds are financed by **banks at interest rates** much lower than an individual could obtain, and sometimes, they use money from citizens' own **pension funds**.
## Unequal Competition
These funds do not compete in the same league as an individual investor. Their modus operandi is the purchase of **entire buildings**, not individual apartments. When the ownership of a residential building falls to a fund, the tenant's negotiation power is reduced to zero, creating an imbalance.
The real problem is not the funds themselves, but the **legislation** that allows income extraction without the obligation to maintain or improve the property. The funds exploit existing legal loopholes, they do not create them. Modifying taxation and land regulations could be key to deterring these practices.
The individual buying an apartment to rent is not the same as an **investment fund** based in **Luxembourg** with tax advantages that escape the average citizen. This is the argumentative trap often used to equate situations that are far from similar.
## Tax Advantages and Financing
A **SOCIMI** (Spanish REIT - Real Estate Investment Trust) pays virtually **0% in corporate tax**, while an individual with two apartments pays income tax at rates of **24% to 30%**. This is not simple investment, but fiscal engineering with legal backing. Furthermore, these funds are financed by **banks at interest rates** much lower than an individual could obtain, and sometimes, they use money from citizens' own **pension funds**.
## Unequal Competition
These funds do not compete in the same league as an individual investor. Their modus operandi is the purchase of **entire buildings**, not individual apartments. When the ownership of a residential building falls to a fund, the tenant's negotiation power is reduced to zero, creating an imbalance.
The real problem is not the funds themselves, but the **legislation** that allows income extraction without the obligation to maintain or improve the property. The funds exploit existing legal loopholes, they do not create them. Modifying taxation and land regulations could be key to deterring these practices.
Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (2 replies).
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