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Real estate tax

Across the globe, real estate transactions are becoming increasingly sophisticated, with changes in the market, popular asset classes and in how transactions are effected. A great deal of real estate now passes hands indirectly through corporate and other structures, rather than directly, offering increased liquidity and tax efficiencies. However, these developments do pose other issues that must be resolved.

Real estate tax legislation has also evolved rapidly. Now there is a variety of new anti-avoidance measures, including those revolving around the Base Erosion and Profit Shifting measures, different tax treatments for different assets and an increased range of international tax-efficient holding vehicles such as REITs. These industry shifts require businesses to rethink conventional ownership structures.

Financing techniques are also changing and are likely to continue to do so, with some likely to be less efficient than others in the future. Investors should keep a close eye on this area. Meanwhile, an understanding of new tax proposals and their implications for the sector is essential to identify the correct structures, minimize unnecessary tax costs and maximize returns.

Taxation of real estate can give different results for different investors. Eversheds Sutherland works with a wide range of clients from sovereign wealth funds, property companies, developers, institutions, pension funds and fund managers to find the structure that works for them.

Experienced in real estate tax law

Eversheds Sutherland’s dedicated real estate tax team pride themselves on understanding the attributes of the differing asset classes, your business and what really matters to you. Our lawyers include active members of key industry committees and Revenue working groups. This involvement ensures that we remain at the cutting edge of this sector. We take a proactive approach and work closely with you help to shape new products that work for your business, such as real estate investment trusts, and to identify appropriate structures, such as the property authorized fund, the authorized contractual scheme [ see link to funds page] and other more traditional options.

We offer a one-stop shop for real estate investments, whether direct or indirect, joint ventures or funds. Our service covers everything from the inception of a project to structuring advice and detailed guidance on the transaction itself. We advise on all direct and indirect taxes, including stamp duty land tax, other transfer taxes, VAT, capital allowances, withholding taxes, as well as asset-specific taxes and direct taxation of income and gains. On structuring, we work closely with our real estate, corporate, funds, finance and regulatory colleagues to ensure a seamless product.

In addition to advice on direct real estate, we handle indirect real estate. Our lawyers deal with structuring issues that can arise on corporate sales and purchases and the commercial issues that come about when more than one party is involved in the structuring. See our indirect real estate brochure .

Our experience includes:

  • advising on inward investment and the particular issues this raises. In the UK, for example, the residential sector is now treated quite differently from a tax perspective to the commercial real estate sector
  • advising on asset-specific issues, such as multi-family residential properties, logistics, hotels, healthcare and student accommodation as well as offices, commercial buildings and shopping centers
  • minimizing the impact of the Foreign Investment in Real Property tax (FIRPTA)
  • utilizing blocker structures
  • advising on acquisitions, developments, sale and leasebacks, mixed-use developments and joint ventures, using a variety of vehicles
  • corporate sales and purchases
  • real estate finance
  • real estate and real estate debt funds

Contact our real estate tax team

If you would like any further information or need advice on real estate tax matters, please contact our legal team.

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