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Real Estate
Sector

Transfer Pricing in the Real Estate Sector

The real estate sector involves a significant volume of intragroup transactions, such as the purchase, sales, rental, management and exploitation of real estate properties, such as residential properties (e.g., houses, apartments), commercial properties (e.g., office buildings, retail spaces), industrial properties (e.g., warehouses, factories) and land. The industry also includes real estate investment trusts (REIT), entities that own, operate, or finance income-generating real estate and offer shares in these properties to investors.

Transfer pricing analyses play an increasingly important role in the definition and management of real estate projects, as the return on investment (ROI) improves with tax-efficient structures and tax risk minimisation.

Our sector experts may provide assistance in the following matters:

  • Definition and review of the financing strategies for Buy to lend, Build to sell and Build to rent options, such as back-to-back financing, the analysis of the acceptable level of indebtedness for Special Purpose Vehicles, or the evaluation of equity risk and the arm’s length remuneration for holding entities.
  • Determination of the interest rates applicable to intercompany loan facilities.
  • Elaboration of the contracts that regulate the intragroup operations, such as asset management services (project management and property management) and the transaction-based fees (finder’s fees, disposal fees, acquisition fees).
  • Allocation of common structure costs among management companies.
  • Profit-split modelling for multi-country arrangements.

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our real estate sector transfer pricing experts

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