Local property firms may organize and sell shares of real estate investment trusts by the end of June this year after the Securities and Exchange Commission (SEC) en banc committee approved the Implementing Rules and Regulations (IRR) of R.A. 9856, otherwise known as “The Real Estate Investment Trust (REIT) Act of 2009.”

In an interview, SEC commission secretary Gerard Lukban said they will have the IRR published and then sent to the University of the Philippines Law Center so it can take effect. He said the process will take about 45 days.

Lukban said the version approved by the SEC en banc committee contained no major changes from the draft earlier issued by the commission although there were some refinements of terms used.

He said the ony substantial change made from the draft was the raising of the minimum capitalization for fund managers tasked to handle the REITs to P100 million from the P10 million contained in the draft.

The IRR already include inputs from the Bureau of Internal Revenue on the tax aspects of the law since the REIT Law provides for tax incentives for companies putting up and selling shares of REITs to the investing public.

The IRR of RA 9856 shall make way for the full implementation of the REIT Act which seeks to promote the development of capital market and democratize wealth by broadening the participation of Filipinos in the ownership of real estate companies in the Philippines. The REIT law also aims to use the capital market as an instrument to help finance and develop infrastructure projects and protect the investing public.

With a minimum capitalization of P300 million, a REIT company may apply for registration of its securities with the SEC and avail of incentives as provided for by the law, such as favorable tax rates and lowered fees.

On the side of the investor, shareholders will be assured of steady income flow with the law requiring REIT companies to declare annually at least 90 percent of its distributable income as dividends to its shareholders.