Pure Multi-Family REIT LP offering will permit RRSPs and Canadian individuals to invest in US real estate with similar tax results to investing in a Canadian REIT

As described in a preliminary prospectus, it is proposed that a newly-formed Canadian-listed LP will invest in a newly-formed US private REIT.  As this will be the only asset, there will be no SIFT tax, and a portion of the cross-border distributions will be received for Canadian purposes as return-of-capital distributions.

The US REIT is targeted to be exempt from US corporate tax; and its distributions that are paid out to qualifying Canadian residents are targeted to be eligible for Treaty-reduced rates, e.g., 0% for RRSPs and 15% for most Canadian individuals.  Assuming appropriate foreign tax credits for the latter, this produces the same or similar results to their investing in a Canadian REIT.  Sounds good.

Neal Armstrong.  See summary of 18 May 2012 Prelim. Prosp. for IPO of Pure Multi-Family REIT LP.