Singapore REITs

How to Invest in REITs in Singapore

There are three primary ways to invest in Singapore REITs:

1. Purchase shares of companies directly on the Singapore Stock Exchange using a broker.
2. Purchase shares of ETFs that hold Singapore real estate companies.
3. Buy into a fund (hedge fund) that invests in real estate.

How are Singapore REIT Dividends Taxed at the Shareholder?

In Singapore dividends received by unit holders from REITs are taxed as regular income at the individual unit holder’s progressive marginal tax rate.

Singapore tax residents receive a tax credit of 100% granted for the first $500 of dividends received. Dividends received from Singapore-listed REITs are exempt from additional shareholder-level taxes such as withholding tax.

For example, a shareholder receives a dividend of $1000 from a Singapore REIT. The first $500 of dividends received is exempt from income tax, the remaining SGD 9,500 would be subject to Singapore’s progressive income tax rates being at minimum 22%. The minimum tax to pay would be SGD 2,070.

In Singapore for a REIT to be considered a “qualifying company” and eligible for the imputation credit system it must meet the following conditions:

1. It must be a resident company for tax purposes.
2. It must be widely held, meaning that no one person or group of associated persons owns more than 50% of the voting rights or equity in the company.
3. It must have paid at least 90% of its taxable income in the form of dividends in the relevant tax year.

It’s important to note that not all REITs meet these criteria and therefore not all dividends paid by REITs may be eligible for the imputation credit system.

It is important to check with the REIT and consult a tax professional

REIT ETFs in Singapore

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