• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 8/5/2013

South Africa - Tax implications of REITs (effective in 2013) 

August 5: Real estate investment trust (REIT) tax rules were introduced for the first time in South Africa for years of assessment commencing on or after 1 April 2013


For many years investment in immovable property has been a very lucrative form of passive investment in South Africa—particularly when comparing the South African property market with countries like the United States or Europe.

Property investment vehicles have facilitated such investment into multiple and/or high value properties for a wide range of investors.

Abroad, investment opportunities into such property vehicles are given tax certainty through a special tax dispensation for any entities that qualifies as a REIT. The principle of the tax dispensation is that the investors are taxed as if they are direct investors in the immovable property, albeit that they collectively invest through the REIT.

However, after many years of debate, South Africa only recently followed suit with the new tax rules for REITs.

Read a July 2013 report prepared by the KPMG member firm in South Africa: South African REITs – what are the tax implications?

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