Interesting investment to consider with your deposit money - a residential REIT

Brendan Burgess

Brendan Burgess

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One of the problems facing people saving up to buy a house is that they feel that house prices will rise faster than they can save. They keep their money in a deposit account earning 1% interest. If prices rise by more than this, their savings become a lower percentage of the house price.

A new REIT is being launched which will invest in residential property. This will be like a share trading on the stock exchange. If house prices go up, this should also go up. If house prices fall, this will fall in value.

Investing in any one share is risky, but it's worth considering.


Irish Residential Properties REIT, which is owned by a Canadian company, signalled that it plans to float on the Dublin market and raise about €200 million.


The firm, which is a subsidiary of Toronto-based Canadian Apartment Properties Real Estate Investment Trust, follows Hibernia REIT and Green REIT onto the Irish Stock Exchange, but unlike those two trusts, its investment strategy concentrates mostly on residential apartment blocks.


The company said it would focus on buying and managing investments in the apartment blocks in urban areas across in Ireland.


It began operating last September when it bought four apartment blocks in Dublin for about €42.2 million. This initial portfolio will comprise 338 residential units across the four properties, which were valued by CBRE at the end of 2013 at €45.5 million.
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You could end up losing your deposit if prices fall! Too risky to be advising these as suitable for someone saving for a house
 
Can anyone confirm the tax treatment of REITs? Is it similar to a managed fund or an individual share/stock?
 
Assuming you are an Irish resident for tax purposes, you pay ordinary income tax (PAYE + USC + PRSI) on the dividends, and Capital Gains Tax on any gains when you sell the shares.
 
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