There is now an option for investors to hold their REIT and stock investments under a PERA or Personal Equity Retirement Account courtesy of DragonFi. The benefits of doing so include:

*A 5% tax credit on contributions (up to ₱10,000 per year for Filipinos and ₱20,000 for OFWs)

*All investment earnings and reinvestments are exempt from income taxes. For stocks and REITs, dividend tax will go from 10% to zero
*PERA funds are not subject to estate tax in case of the account holder’s passing

*Funds in a PERA account cannot be seized in insolvency proceedings.

*Companies can contribute to employees’ PERA accounts, making it a great employee benefit

There are downsides to PERA as well compared to simply using an ordinary individual account:

*contribution limit of  ₱200,000 per year or ₱400,000 for OFWs

*limited to stocks that are part of the PSE Index, Dividend Yield Index and REITs

*You can only withdraw tax-free once you are at least 55 years old with 5 years of contributions. Early withdrawals are subject to significant tax penalties unless due to permanent disability or hospitalization exceeding 30 days.

*Account and administration fees (0.4 – 0.6% per annum) can add up over time.