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An overview from ENS, Taxand South Africa
South Africa has expanded its real estate investment trust (REIT) regime to allow certain unlisted property companies to qualify for REIT status for the first time. The change applies to companies owned by specified institutional investors, including insurers, retirement funds, certain state-owned companies and listed REITs, following the publication of new requirements by the Minister of Finance on 19 August 2026.
To qualify, an unlisted company must meet a series of financial and ownership conditions. These include having at least 80% of its assets attributable to immovable property or property companies, generating at least 75% of revenue from rental income, maintaining liabilities of no more than 60% of total assets, and holding gross assets of at least R300 million. Companies must also distribute at least 75% of distributable profits to shareholders within six months of their year-end and be South African tax residents.
The new rules represent a significant widening of South Africa’s REIT framework, which had previously excluded all unlisted companies. The requirements took effect when the Notice was published and apply to years of assessment beginning after 19 August 2026, giving qualifying institutional property structures access to the tax certainty and benefits offered by the REIT regime.
Tax experts from ENS, Taxand South Africa, provide a comprehensive overview of the regime.
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