REIT Taxation

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SMBIRE

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As REITs are topical at the moment I'm curious to know what the tax advantages are that they have over individuals looking to purchase their PPR or invest in buy to let property.

I'm looking at the tax and duty manual - Real Estate Investment Trusts (REITs) Part 25A-00-01 to get a better understanding.

Basically they don't pay CGT on gains and they don't pay CT provided they distribute 85%+ of rental income.

In practice how are they benefiting over the individual looking to buy a property?
 
The dividend income is, of course, taxable in the hands of individual shareholders at their marginal rate and also is chargeable for USC and PRSI.

So reports that the profits from renting are not taxed is not true.

Individual shareholders who make gains on the sale of shares in REITs are liable to CGT
 
The benefits are the diversification of owning a share in lots of properties, the liquidity whereby you can sell your investment immediately, the lower transaction costs on the way in/out, and the fact that it allows for smaller amounts.
 
important to remember that the main REIT in this country with respect of residential property has completely failed to track the market to any degree

investing in a REIT wont give you exposure to a rising market , they provide you with a very decent dividend yield though , every bit as good as a BTL in my opinion when you consider there are no expenses , when i bought the main residential one , it had a dividend yield of 4.1% , over a ten year period , most direct property would not beat that when you consider the REIT,s own property in good locations

overall i think they are a decent investment for income , i also own the main commercial REIT, dividend currently of 4.5%
 
Gordon Gekko said:
The benefits are the diversification of owning a share in lots of properties, the liquidity whereby you can sell your investment immediately, the lower transaction costs on the way in/out, and the fact that it allows for smaller amounts.
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Are REITs able to take on more leverage, and at a lower cost, than an individual landlord?
 
Bill Nowlan of Hibernia Reit fame has a piece in the IT batting for them
www.irishtimes.com

Reits are not the enemy and emotion is not a policy

If we turn our back on them we better be ready for the implications of adding €20bn to our national debt
www.irishtimes.com www.irishtimes.com

The real sorry state of affairs was the facilitation of section 110 SPVs to be tax neutral enabling investors to shift income and capital gains from domestic assets overseas, untaxed.
 
Itchy said:
The real sorry state of affairs was the facilitation of section 110 SPVs to be tax neutral enabling investors to shift income and capital gains from domestic assets overseas, untaxed.
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This was far too lax of course but IIRC was removed in 2017.

It doesn't seem to have stopped institutional landlords from staying involved.
 
I notice several papers say round house is a Reit and this article says it isn’t, and this one seems informed, do they amount to much of the same thing?
 
Can anyone confirm that the tax treatment of REITs on death is the same as that of equities?

Specifically, am I right in thinking that unlike ETFs—which are subject to a 41% exit tax on any realized gain to the date of death—REITs, which like equities are subject to income tax on dividends and CGT on disposal, are also like equities in being exempt from CGT on the death of the holder, and are thus inherited by the beneficiary on a stepped-up basis at their current market value, before the imposition of any CAT that may apply?
 
Yes, a share in a REIT is treated as a share in a normal company - the CGT dies with the death of the holder
 
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