Property Cos

Features of listed property companies

More than 80% of the listed property companies (by value) that could convert to REIT status have done so, and the attraction of the remaining companies, despite their liquidity, may be affected by their relative tax inefficiency.

There are a few companies, however, that offer exposure to specialist investment sectors such as residential property, and a number of property development companies are listed.

Factors to be aware of

As with REITs, shares in property companies trade at a discount to net asset value and perform like equities in the short term. They are relatively inefficient in tax terms, as investors are effectively taxed twice on the profits of the company.

Tax issues

The tax issues include the fact that the company is subject to corporation tax on income and capital gains, and investors are also subject to tax on dividends received and the proceeds of sale of shares in line with the position of other shares.