REITs’ income tax, GST concessions extended for five years

Income tax and Goods and Services Tax (GST) concessions for real estate investment trusts (REITs) in Singapore will be extended for five years, to support their public listings.

The GST concession will also be enhanced to facilitate fund-raising by special-purpose vehicles set up by REITs, said Finance Minister Tharman Shanmugaratnam in his Budget speech yesterday. Stamp duty concessions — used primarily for buying local properties — will lapse after March 31, he added.

Their removal is likely to have little impact, said Ms Christine Li, director of research at real estate services firm Cushman & Wakefield. “Many established REITs are already exploring buying opportunities overseas ... Only the newly set-up REITs, such as those in the industrial segment, might have to be less aggressive in acquiring properties here due to the removal of the stamp duty concession,” she said.

The five-year extension for the concessions will ensure Singapore’s continued dominance as a hub for Asia REITs listings for the near future, said KPMG Singapore tax partner Leonard Ong. VALERIE KOH

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Other documents on Budget 2015 available on the Budget 2015 website.