A Real Estate Investment Trust or REIT
is a tax designation for a corporation investing in real
estate that reduces or eliminates corporate income taxes.
In return REITs are required to distribute a large majority
of their income, which may be taxable in the hands of the
investors. The REIT structure was designed to provide a
similar structure for investment in real estate as mutual
funds provide for investment in stocks.
India is currently in the process of formulating definitive
legislation for the introduction and smooth functioning
of REITs in the Indian real estate market. Once introduced
these Indian REITs (country specific/generic version I-REITs)
will help individual investors enjoy the benefits of owning
interest in the securitised real estate market. The best
benefit being that of fast and easy liquidation of investments
in the real estate market unlike the traditional way of
disposing real estate.
In the U.S., REITs generally
pay little or no federal income tax, but are subject to
a number of special requirements set forth in the Internal
Revenue Code, one of which is the requirement to annually
distribute at least 90% of its taxable income in the form
of dividends to its shareholders.
Mumbai Real estate developers are promoting sprawling
townships, shopping malls, software parks and office complexes
across the city, as the insatiable hunger for real estate
grows.There is a sustained supply of residential properties
all across Mumbai. Lifestyle apartments featuring state-of-the-art
amenities are mushrooming across the city. Mumbai has witnessed
exponential growth in the real estate market over the past
year with prices appreciating by more than 100%. Mumbai
seems poised for a quantum leap in property investment proposition.
