Real Estate Investment Trust

Real Estate Investment Trust


An uncertain economy, the prospect of a continued rise in interest rates, and changes in tax regulations all have the potential to delay growth for real estate investment trusts (REIT’s). BDO’s REIT tax team understands changing market conditions in South Africa and abroad, as well the challenges they present. BDO’s REIT tax team’s involvement with our various REIT clients, participation in organizations, and industry specific tax contributions keeps us abreast of the current political, economic, and market events impacting our clients.

Our REIT tax team can assist you on all tax aspects affecting REIT’s, covering the full property investment journey covering small property companies to the largest JSE listed REIT’s and their investors.

Tax legislation governing REIT’s is designed to treat REIT’s as profit and capital gain flow-through vehicles, leaving the REIT to focus on producing profits and growing capital. As with most tax laws, those governing REIT’s, which are intertwined with REIT listing requirements, are complex and unforgiving of ignorance. Let BDO’s REIT tax team guide you on your REIT tax journey.

Some of the current challenges facing REIT’s posing a real threat to REIT’s favourable tax treatment include:

  • Maintaining a 75% ‘rental income’ level;
  • Maintaining a 75% distribution level;
  • Maintaining asset and debt level listing requirements;
  • Subsidiary level funding structures threatening the above;
  • Venturing offshore into unchartered tax territories;
  • Controlled foreign company tax legislation which has not kept up with the times; and
  • Facing provisional tax underestimation penalties;

Our REIT tax team has extensive experience in servicing REIT’s tax needs with 17 years of listed property tax advisory experience at tax partner level. We look forward to being part of your REIT journey.