Tax on Property dividents

[#1]

Any truth in the "romour" that tax is due on the dividents of property stocks eg Growpoint and Redefine. I thought all dividents were tax free. ??

[MAGICIAN]

They have always been taxable - they are not dividends but interest.

[#3]

Ok thanks... was not aware of thiss .. no wander their DY is so attractive.

[#4]

even after tax, they beat most dividends on the stock market, so they are an excellent investment, IMO, just not sexy. Don't expect much on the capital gains side. Interesting enough, is that if you run a low price to net asset value scan, almost all the property stocks come up on the list. Most are trading below their net asset value, probably a symptom of the market not trusting the book value of properties at the moment

[#5]

Ok Thanks for info . I think I will setlle for Datacentrix or ALTECH then.They also look good ie DY% and EY%.

[#6]

Thanks Magician . so If I hold onto the prop share for 3 years then I pay Capital gains tax of 10 % on the "interest".?

[SimonPB]

no, interest is taxed at marginal rate, after the tax free portion ..

[#8]

Ok Thanks Simon.. by the way .. nice show with Alec H in the evenings .. good content to listen to. When will you be starting your new venture i.e. education "rollout". I've chatted to some investing friends and they are quite keen to look at something like this instead of the more tradional Face to Face classes.

[G_V_V]

It's not about the market not trusting the book value, it's about the share price coming down when the interest rate starts to rise. It works the same as a gilt. The dividend has to remain competitive with the increasing interest rate and the only way it can do that is if the share price goes down. The opposite happens when the rates are falling. Only when the rents of the property start to rise from inflation will the share prices rise.

[SimonPB]

goes live in March .. details at www.justonelap.com