Listed Property (Taxation) – Definition

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Listed Property (Taxation) Definition

Listed property refers to assets that are depreciable in nature and are used for tax purposes as they have no implication in financial reporting. This property can serve either personal or business purposes. Listed property such as automobiles, smartphones, and many others are subjected to certain tax rules if they are meant for business purposes.

A Little More on What is Listed Property

Basic examples of listed property are smart or cell phones, automobiles including boats and airplanes, computers, sound/recording equipment, and any property included by tax code. But in a case where we have listed property serving both personal and business purposes, they can be called mixed-use property.

ADS means Alternative Depreciation System, it is method for calculating depreciation in listed property, depreciable assets purchased for business purposes. For, instance, if you use less than 50% of an asset for business, depreciation can be claimed based on the time the asset was used for.

However, only the business-use portion of an asset may be depreciated, an asset used for personal and business use will be tracked. If an asset then only serves business purposes, the qualified business use is calculated in the the asset’s depreciable portion.

References for Listed Property

Academic Research on Listed Property

•    Investor sentiment and noise traders: Discount to net asset value in listed property companies in the UK, Barkham, R., & Ward, C. (1999). Journal of Real Estate Research, 18(2), 291-312. This article is an investigation of the connection between the Net Asset Value (NAV) of property companies in United Kingdom and their market capitalizations. NAV is arrived at by the calculation of the total value of the entity’s assets minus the total value of its liabilities. Market capitalization on the other hand is calculated by multiplying a company’s shares outstanding by the current market price of a share. This article examines the differences between the NAV and market capitalization closed-end funds and in the UK property companies. The study shows that in these two entities, the NAV is usually higher than the market capitalization. The hypotheses that emanated from this study were also discussed.

•    Listed property trusts in Malaysia, Newell, G., Hwa, T., & Acheampong, P. (2002). Journal of Real Estate Literature, 10(1), 109-118. This article discusses Listed Property Trusts, its effect on investments and its performance analysis between 1991-2000. Listed property trusts are efficient when investing in indirect real estate.  Listed property trusts was first established by Malaysia in 1989 and the goal is to create funds and capital growth through investment. A look at the performance of property funds in Malaysia revealed that its effectiveness was reduced by structural and regulatory policies in the country. This article also presents effective methods or strategies that will enhance the adequate performance of property trust in Malaysia including may other countries.

The strategic significance of environmental sustainability by Australian-listed property trusts, Newell, G. (2008). Journal of Property Investment & Finance, 26(6), 522-540. This paper discusses the significance of Listed Property Trusts (LPTs) in Australia and the ways they are implemented to achieve a lot of purposes including the creation of a sustainable environment. Australia maintains a top position when we talk of countries with international best practices in environmental sustainability for commercial property. Due to the effective strategies they employ, they have a global recognition in LPTs. This paper assess the effective and intelligent strategies that Australia use at the corporate, commercial, individual and portfolio property levels. The assessment was carried out through analysis of content, annual reports, sustainability reports and corporate responsibility.

The changing risk profile of listed property trusts, Newell, G. (2006). Australian Property Journal, 39(3), 172. This paper presents an analysis of the performance and the changing risk profile of LPT in recent years Quite a number of factors affect and influence risks in Listed Property Trusts and this has caused a lot of changes in LPT sector in recent times.  The impact of changing risk profile in LPT include increase in debts, increase in international property as well as significant mergers and acquisitions. This changing risk profile has not only affect the existing sectors in LPT, it is also impeding the effectiveness of young LPT sectors. This paper assess the expectations of higher LPT risks levels and their outcomes in portfolio or property sectors.

Macroeconomic risk factors in Australian commercial real estate, listed property trust and property sector stock returns, West, T., & Worthington, A. C. (2006). Journal of Financial Management of Property and Construction, 11(2), 105-116. This paper discusses the effects of macroeconomic risk factors that are significant in Australian commercial real estate, listed property trust and property sector stock returns between 1985 and 2002. The effects are examined using the GARCH-M model, this model states that the return of a security may be dependent on its volatility. Hence, there is a likelihood of variation in market returns, stock returns and trading prices in line with interest rates which may be short, medium or long-termed. Although, macroeconomic risk factors play major roles in Australian commercial property returns, this paper takes time to study the accuracy of the GARCH-M model in property investment and stock returns.

Corporate focus and stock performance international evidence from listed property markets, Boer, D., Brounen, D., & Op’t Veld, H. (2005). The Journal of Real Estate Finance and Economics, 31(3), 263-281. This is a discussion as to whether corporate focus reflect on stock performance or not, it is an analysis of the relationship between corporate focus and stock performance using international markets such as the Swedish, Dutch and French markets. This study was carried out using 275 property companies that are in the category of international markets. Property companies in France, Britain, U.S. and Sweden were analysed with a view to discovering the different corporate focu strategies these companies use and how well this translate into superior stock performance. Corporate focus is expressed in diverse dimensions such as industrial focus, geographical focus, these are analysed and used to measure the stock performance of these companies.

Listed property trusts in Malaysia: a comparative performance analysis. Hwa, T. K. (1999, January). In International Real Estate Society Conference (Vol. 99, pp. 26-29). This paper presents a comparative analysis of the performance of listed property trusts in Malaysia between 1991 and 2000. This paper aims to find out the possibilities of listed property companies in Malaysia in terms of investment in residential properties, risk returns and shares. Investment production and implementation of listed property companies are relatively measured and analyse and their investment performances are compared with shares. This paper also examines the level of portfolio diversification listed property companies are able to offer, whether property shares represented by property index perform better than risk-based adjusted shares and whether they can act as substitutes for direct residential property investments or not.

Downside beta and the cross-sectional determinants of listed property trust returns, Lee, C., Robinson, J., & Reed, R. (2008). Journal of real estate portfolio management, 14(1), 49-62. One cannot undermine the significant roles of downside beta in the process of explaining the volatility or variations in the listed property trust returns in Australia. A study was conducted between 1993-2005 and it was discovered that downside beta performs better than its counterpart conventional beta in explaining variations in returns of LPT. Despite the effectiveness of downside beta, its potency in explaining variations is reduced once the control of co-kurtosis takes place, this enables portfolio managers manage risks. Hence, this study encourages managers to develop new insights in the analysis of pricing and variations in LPTs.

The development and performance of listed property trust futures, Newell, G., & Yen Keng, T. (2004). Pacific Rim Property Research Journal, 10(2), 132-145. This journal focuses on the outlook of Listed property trust futures which include their significant performances from the date of establishment. Listed property trust futures were created in 2002 and have proven to positive measures to manage risks in institutional investments. The Australian Stock Exchange (ASX), initiated the listed property trust futures in 2002, since 2002, listed property trust futures are noticeable for helping investors guard their listed property trust exposure. This journal presents an overview of the development and significant performance of listed property trust futures over the years.

Performance of property listed companies in Malaysia: 1996-2007, Abdullah, N. A. H., Zahari, W., & Marazah, W. (2011).  This paper uses all indexes; Sharpe Index, Adjusted Sharpe Index, Treynor Index, Jensen Index and Adjusted Jensen Index to examine the performance of listed property in Malaysia, the study is a comparative performance analysis of listed property companies in Malaysia within the three crisis periods 1996 to 2007. The study observes and explains how well or badly these companies performed in the three sub-periods; pre-crisis, during crisis and post-crisis. The study however observes that many listed property companies performed below expectations a they had an average of negative returns. This study also examines why it is necessary for managers to have a new outlook when managing their portfolio companies.

Are state-owned companies underperforming? A case study of Chinese listed property companies, Ke, Q. (2008).Journal of Real Estate Literature, 16(2), 181-200. This is a study of the performance of listed property companies in China since the establishment of privatization program in April 1984. This study aims to find out whether state-owned companies are underperforming because of the evolvement of private companies since they have a conducive atmosphere to develop. Since 2000, private markets have grown and they seem to be outgrowing state-owned companies in terms of performance and relevance. This study however looks at the discrepancies in the performance of the state-owned and private companies and the ownership of China’s listed property companies.

Selectivity, timing and the performance of listed property trusts: Implications for investment strategies, Peng, V. (2004). Pacific Rim Property Research Journal, 10(2), 235-255.

 

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