The long-awaited arrival of Reits will ease the tax burden

commercial property

The introduction of Reits next year will mean investors can buy commercial property without incurring double taxation, but they will have to be prepared for some short-term volatility

The holy grail of the quoted commercial property market, real estate investment trusts (Reits), arrive in the UK on the 1 January 2007, when these tax-efficient quoted property vehicles become legal entities. Up to now quoted property companies have had to put up with paying tax on rental income and on capital gains, a fact that makes the significant long-term outperformance of the quoted property sector over the underlying market all the more impressive. But this tax burden will no longer exist as Reits do not pay tax on rental income or capital gains. Reits are no new fad as they have be...