Tax changes planned for Aussie REITs

Tax changes planned for Aussie REITs

(LONDON) The Australian government plans changes to the tax treatment of Australian listed property trusts (LPTs) that will boost their competitiveness abroad, an Australian trade magazine said yesterday.

According to a report in Financial Standard, the Minister for Revenue and Assistant Treasurer Peter Dutton said plans were afoot to provide LPTs - the Australian version of real estate investment trusts (REITs) - a means for rolling over some of their capital gains tax (CGT) liabilities.

'This may have implications for Australian REITs' expansion plans into Europe, as they will be better able to justify potential transactions to their investors on more attractive after-tax ROEs,' a note from investment bank JP Morgan said.

As well as providing a capital gains tax rollover for investors where there was a unit trust in place between a stapled group and its stapled entities, the planned changes would also ensure there were no tax triggers that might lead to the entire income of the interposed unit trust being treated as if it were a company.

'These proposals seek to improve the international competitiveness of stapled entities, such as Australian property trusts, and to facilitate their expansion into offshore markets,' Mr Dutton was quoted by the report as saying.



Cash-rich Australian property funds invested around US$6 billion in Europe last year, more than half of it in Germany, data from property services firm Jones Lang LaSalle showed last month.

Another US$3 billion each was invested in Asian and US property, fuelled by annual inflows into Australian property funds of about US$4 billion annually, Jones Lang said. - Reuters