This page is quite old hence its rather spartan appearance.
Why not check out our Latest Stories page for our newest articles or search our site for anything.
Many people want to invest in property, but don't have either the skills to become a property developer, the time to be a landlord, or the money and borrowing capacity to be either. From January 2007, you'll be able to invest in tax-efficient schemes called Real Estate Investment Trusts (REITs). In his Budget speech this week, the chancellor announced some changes to his proposals that will open up the competition. The net result for us will mean more choice of funds and, hopefully, lower prices as well. Here's what you might like about REITS: You don't need much money You can invest in REITs for as little as £50 per month, so you won't need a mortgage. Plus, all the mortgage papers, valuation fees, arrangement fees, legal costs and so on are dealt with for you. Although these costs will come out of your contribution, it'll be shared amongst many other investors. You can spread the risk Rather than putting all your eggs into one large, detached-house-shaped basket (or perhaps, a few flat-shaped baskets), you invest in thousands of properties across the world. These could include prison blocks in the USA to office buildings in China. It doesn't take much time or effort No tenants, estate agents, lawyers, plumbers, electricians, or builders, and none of the effort and time-consuming paper work that goes with it. All you have to do is look after your REIT by contributing to it, reading The Fool to stay up to date on rule changes, and deciding when to pull out. You save on tax Most UK-based REITs won't have to pay tax on rental income or chargeable gains, which in turn helps you as you take more of the profits. You still pay income tax on dividends, and tax on capital gains, but... You can wrap them in an ISA to save even more tax If you wrap your REIT in an ISA, you can contribute up to £7,000 each year and any growth from this won't be subject to capital gains tax. Plus, if you're on the top rate of income tax, you'll save on some of the tax on dividends too. Or, if you prefer, you could invest in REITs through a Self Invested Personal Pension (SIPP). Not only are pension funds protected from capital gains tax, but you'll get income tax relief in the normal way. For basic-rate tax payers for every £78 you contribute, you end up with £100 in the pot. If you pay tax at 40%, you'll get additional tax relief. Just one more thing: the Foolish way is to invest for the long-term. This applies to property as much as to shares. Why not take a look at some ISAs, or learn more about saving for retirement in our Pension centre.
