ASSOCHAM welcomes introduction of REIT's in real estate

The Associated Chamber of Commerce and Industry of India (ASSOCHAM) has welcomed the introduction of Real Estate Investment Trust (REIT's), which eliminates the double taxation of built assets with an established rental yield.

"REITs have the potential to attract $15bn to $20bn to finance established assets, which will free up capital for new developments", said ASSOCHAM.

D S Rawat, Secretary General ASSOCHAM said, "REITs is important source of funding across world and there is potential of raising approx 15 billion US$ through this".

The subsequent reduction of minimum size of REITs and will allow many developers to float it on small projects as well. However, it is very important to have more clarity on taxation such as stamp duty, VAT etc. Also, the ratio of completed property and under construction needs to be modified from 90:10 to 70:30.

ASSOCHAM suggests that if any project which is about to complete within one year of floating REITs and income generation can be started within one year shall be allowed to put into it.