Real Estate Investment Trusts (REIT’s) provide certain benefits for investors as opposed to them directly investing in property. Many countries worldwide have already established tax systems for REIT’s which give natural persons and companies the benefit of not outlaying substantial capital, and provide certain tax dispensations to them. The concept of a REIT is new to South Africa. The vehicles that have been used by investors in the past to invest indirectly in property have been Property Unit Trusts (PUTs) and Property Loan Stock Companies (PLS). These different types of entities have had different taxation rules applied to them, as they differed in legal entity, i.e. a trust versus a company. The different types of entity were historically a deterrent to foreign investors who preferred to invest in countries that had the REIT structure and certain tax dispensations. The National Treasury and the South African Revenue Service (SARS) decided to collaborate in this matter so as to encourage foreign property investment, and launched with effect from 1 April 2013, a new REIT tax dispensation for investors in property portfolios. The REIT created a unified regime in South Africa. All portfolios wanting to call themselves REITs had to qualify under certain requirements, and then they would be eligible for the new section 25BB tax dispensation. The South African REIT market is relatively new when compared to the Australian REIT market, which is the second largest in the world. The Australian REIT market has been around for approximately forty three years more than the South African REIT market. The Australian REIT regime is analysed in terms of how REITs are taxed in that country. The final chapter provides a comparison between the South African and Australian REIT regimes. The major differences are identified as to how each country taxes the REITs and the respective shareholders, and from these a few proposals are made which could improve the South African REIT regime in order for it to stand up to worldwide scrutiny.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:nmmu/vital:8963 |
| Date | January 2014 |
| Creators | Breetzke, Michael |
| Publisher | Nelson Mandela Metropolitan University, Faculty of Business and Economic Sciences |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis, Masters, MCom |
| Format | ix, 80 leaves, pdf |
| Rights | Nelson Mandela Metropolitan University |
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