• Service: Tax, Global Mobility Services, International Tax
  • Type: Regulatory update
  • Date: 8/1/2014

South Africa - REIT regime not expanded to “unlisted REITs” 

August 1: A 2014 draft tax law bill, published 17 July 2014 by the Department of National Treasury, includes a variety of proposed amendments—including provisions concerning the real estate investment trust (REIT) tax regime, but not including anticipated changes that would expand the REIT regime to apply to “unlisted REITs.”

REIT regime

The REIT tax regime was first introduced in South Africa in 2013.

While generally viewed as a favorable development, the 2013 REIT tax legislation resulted in certain severe tax implications for REITs and/or the REIT investors. Also, the 2013 regime applied to “listed REITs” only.

Draft amendments

Initial indications were that the REIT draft proposals would expand the REIT regime to unlisted entities; however, these measures were not included in the July 2014 release.

Rather, the proposed amendments to REIT legislation in the draft bill are viewed as being generally contextual in nature.

Tax professionals have expressed hopes that the final 2014 Tax Laws Amendment Bill (expected later this year) may include the desired REIT amendments.

Read a July 2014 report prepared by the KPMG member firm in South Africa: Main concerns on the Real Estate Investment Trust legislation have not yet been addressed (REIT)

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