SA Reit The asset class that delivers
capital appreciation and
annuity income
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How are the company and trust REIT’s taxed?

Both benefit from the REIT tax dispensation, but Trust REITs are taxed as trusts and the Company REITs taxed as companies.

I'm interested in investing in the SA REIT sector?

There are several ways of investing in REITs listed on the JSE. Your current bank, stockbroker or financial advisor may be able to help you with these options.

Direct – this means direct ownership of SA REIT shares.

1. Open a stock broking account with a stockbroker. By doing this you can pick and buy shares in SA REITs yourself or by telling your stockbroker to do it for you.

2. Open an online trading securities account with a bank. Once you’ve opened your account and transferred funds, you can the trade in SA REITs and in any share on the JSE, online.

Indirect - this means investing in a fund that owns SA REIT shares

1. Invest in a property unit trust fund. Many institutions and fund managers offer property unit trust funds, which invest in several REITs at the same time. You can make smaller investments in property unit trusts, but the professional management of the investment comes at an extra cost. To invest, contact the asset manager of a property unit trust. Several asset managers offer the choice to manage your investment online.

2.Buy shares in a property index fund. You buy it directly like an SA REIT share, but it is a property unit trust that tracks the SA Property Index by investing in every REIT on the SA Property Index on the JSE, in proportion to the size of each REIT. There is a lower cost to these funds as the manager does not stock pick, but rather buys the index.

Key words for understanding

  • Conduit = An organisation that acts as a channel for transmission of rental income.
  • Distribution/s = An income a company pays out to their investors/shareholders.
  • Capital Gains Tax (CGT) = Tax that has to be paid to SARS when an investor and/or an organisation sells shares or property for profit.
  • Equity stake = A stake in a company that gives you rights to the profits of the company.
  • Debentures = An unsecured loan certificate issed by a company, backed by general credit rather than by specified asset.
  • Securities tax = Tax paid when buying shares sold on the JSE.
  • Direct tax = Tax implications that directly effect investors.
  • Indirect tax = Tax implications that indirectly effect investors.
  • Effective tax rate = The maximum tax an investor has to pay.