Real estate investment trusts, which facilitate liquid real estate investments, are tax exempt.
Israel’s real estate sector is gathering momentum. The Real Estate 15 index has risen 15% since the beginning of the year, and now real estate investment trusts (REITs) are being introduced. The amendment to the Income Tax Ordinance (New Version) relating to REITs took effect on January 1, 2005, and the Excellence Nessuah investment house announced today the launch of the first REIT, to be called REIT 1.
The new fund is currently in the process of raising capital from investment institutions, and in locating properties to invest in.
A REIT invests directly in property, and provides investors with an almost pure exposure to real estate. According to law, at least 75% of a REIT’s revenue must come from real estate investment. The REIT amendment permits maximum leverage of 60% for real estate assets, and 20% for other assets.
Published by Globes [online] - www.globes.co.il - on January 24, 2006