Last month I blogged about investing in German real estate through a Canadian REIT called Dream Global. I chose this investment for its strong foothold in the European economy and for the consistent high yield. Normally dividends from foreign investments are taxed. However because I’ve bought DRG.UN in my Tax Free Savings Account it wasn’t really clear what would happen. Well yesterday I received new confirmation in my brokerage account so I thought I’d post an update. Thanks for the reminder, Bricks. 🙂
Each Dream Global unit currently pays out $0.066667 per month. Since I purchased 180 shares in January I received $12 in distributions this month. As it turns out there doesn’t seem to be any withholding tax on these payments. 🙂 Below is a history of my TFSA transactions for 2015 so far. As we can see near the end of January I initiated a buy order for Dream Global REIT. And then on Feb 13th, when the company paid its investors, I received $12.00 in my account. 😀
If there had been any foreign with-holding tax it would have been deducted from my account on the same day as I received the DRG.UN distribution. For those who are curious, The abbreviation “TXPDDV” is simply TD’s transaction code used to describe money earned from a combination of different sources including dividend, interest, foreign dividend, capital gains, or return of capital. This is an administrative code used for tax purposes on a T3. In an unregistered account this “TXPDDV” designation means that tax factors have not yet been applied and is frequently misinterpreted as an indication that tax has already been paid. However in a registered account, such as a TFSA or RRSP, there are no T3 tax slips associated with these types of distributions. I called TD Direct Investing earlier today to confirm and that’s what one of their associates told me. So yay. 🙂 I should have invested in this company sooner. 8.7% annual yield on DRG.UN and no tax!
But wait there’s more good news. 😉 Dream Global offers a 4% bonus on their dividend reinvestment plans. Let’s take a look at the stock chart over the last 3 months.
The price per unit is down a little bit since I bought it in January, but the 20 day simple moving average (blue line) is currently trending upwards so that’s a good sign. 🙂
If we look at February 13th, where the vertical yellow line is on the chart above, the unit price hovered between $9.07 to $9.17, closing the day at $9.15. At no point during the day did it fall below $9.07 per unit. However my TFSA transaction history shows that I received a DRIP of Dream Global trust unit on that same day for just $8.72. In other words I was able to buy a unit of DRG.UN at 4% less than the market price. Sweetness. 😀 I’m going to leave DRIP discounts for another post, but basically for every $1.00 of cash distributions reinvested by a unit holder, $1.04 worth of new units will be purchased. 😉
Random Useless Fact:
Atoms have mass. Nuclear weapons are detonated by splitting atoms, which literally makes them weapons of mass destruction.