REITs, or Real Estate Investment Trusts, are an increasingly popular way for investors to diversify their portfolio by investing in the real estate sector. REITs are structured as trusts, with investors buying units in the trust, and the trust then buying and managing real estate properties. REITs provide a steady stream of income to investors in the form of dividends–but when do we get our dividends?
The timing of REIT dividends depends on the individual REIT. But in general, REITs have a set dividend schedule that they follow. Most REITs pay out their dividends on a quarterly basis, with some paying out monthly and others paying out annually. The exact timing of the payment depends on the individual REIT, so it’s important to check the individual REIT’s prospectus for the exact timing.
Once the REIT has declared the dividend, the actual payment date can vary from REIT to REIT. Some REITs will pay out the dividend on the same day as the declaration date, while others may wait up to a few weeks before payment is actually made. Again, it’s important to check the individual REIT’s prospectus for the exact payment date.
It’s also important to note that the dividend payment date is not necessarily the same as the record date. The record date is the date on which an investor must be registered as a shareholder in order to receive the dividend. The record date is typically set a few days prior to the actual payment date. Check the prospectus for the exact record date.
How Do I Receive My REIT Dividend?
Once the REIT has declared and paid out its dividend, the next step is to actually receive it. Most investors receive their dividend in the form of a direct deposit into their bank account. If you are a shareholder in an individual REIT, you can typically set up a direct deposit with the REIT itself. Alternatively, if you are a shareholder in a REIT that is publicly traded on a stock exchange, you may be able to set up a direct deposit with your broker.
If you are not set up for direct deposit, you can still receive your dividend. Many REITs will mail out a physical check to shareholders who have not set up a direct deposit. The check can then be cashed at any bank or financial institution.
What Is the Withholding Tax on REIT Dividends?
When you receive a dividend from a REIT, it is subject to withholding taxes. The exact rate of withholding tax can vary from REIT to REIT, and from country to country. Generally speaking, the withholding tax rate is between 15% and 25%. For example, in the United States, the withholding tax rate for REIT dividends is currently 15%.
It’s important to note that the withholding tax is not the only tax you may have to pay on your REIT dividends. Depending on your individual tax situation, you may have to pay additional taxes on your dividend income. For example, in the United States, you may have to pay additional taxes on your dividend income if your income is above certain thresholds. It’s important to consult with a tax professional to ensure that you are paying the right amount of tax on your dividend income.