What is an SIIQ?

In recent years, interest in the Italian real estate market has grown towards the Società di Investimento Immobiliare Quotata, commonly known as SIIQ. But what exactly is an SIIQ, and what advantages does it offer investors? Let’s find out together.

Legislation and Fiscal and Practical Aspects of Real Estate Investment in Italy

Società di Investimento Immobiliare Quotata (SIIQ) are joint-stock companies listed on a regulated stock exchange, primarily engaged in the acquisition, management, and enhancement of income-producing real estate, mainly for rental purposes. In short SIIQ is the Italian implementation of the Real Estate Investment Trust (REIT). They represent a form of real estate investment in Italy, regulated by Legislative Decree No. 58 of 1998 and subsequent amendments, particularly Article 1 of Legislative Decree No. 164 of 2007.

SIIQ Regulations

According to the regulations, SIIQs must meet certain structural and operational requirements:

  1. They must be established as joint-stock companies and have their legal and administrative headquarters in Italy or in a member state of the European Union.
  2. They must be listed on a regulated market in Italy or another EU member state.
  3. Their primary activity must be the acquisition, management, and enhancement of income-producing real estate for rental purposes.
  4. At least 80% of the value of the real estate assets must consist of rented or rental properties.
  5. There are additional requirements regarding control, minimum free float (25%), and shareholder composition.

Fiscal Aspects of SIIQ

SIIQs benefit from a tax exemption on real estate income and financial income derived from real estate participations, provided they distribute at least 70% (previously 85%) of the net income from real estate (“tax-exempt management”).

However, SIIQs are subject to Corporate Income Tax (IRES) and Regional Business Tax (IRAP) on profits from ordinary management. Additionally, dividends distributed to shareholders are subject to taxation.

Practical Aspects of SIIQ

Investing in an SIIQ can offer several advantages. First, it allows access to the real estate market with a lower investment compared to the direct purchase of a property. Furthermore, thanks to stock exchange listing, SIIQ shares are easily tradable, making the investment more liquid than direct real estate investment.

Another positive aspect of SIIQ is the obligation to distribute profits, which can ensure a periodic income stream for investors.

However, like any investment, SIIQs also involve risks, including the risk of share price volatility, the risk related to real estate market trends, and the risk that the company may not be able to distribute the expected profits.

In conclusion, SIIQs represent an interesting option for investors seeking access to the real estate market with high liquidity and a potential income stream. However, it is always important to carefully assess the risks and potential rewards before making an investment.