Effective until a final payment on September 15, 2025, European Residential REIT (“ERES”) paid a monthly distribution to eligible Unitholders and holders of class B limited partnership units (“Class B LP Units”) of ERES Limited Partnership, of which only a portion is taxable. The non-taxable portion of any net realized capital gains and any other amount in excess of the net income payable to Unitholders and holders of Class B LP Units will not generally be included in the income of Unitholders or holders of Class B LP Units for the year.
Income Tax Considerations – Distributions
Taxable Canadian-resident Unitholders and holders of Class B LP Units generally are required to include taxable income received in their income tax return.
Canadian Unitholders will receive a Statement of Trust Income Allocations and Designations (“T3”), and Canadian holders of Class B LP Units will receive a Statement of Partnership Income (“T5013”). You should receive a statement from either your financial institution or advisor if you hold your Units or Class B LP Units in an account, or directly from ERES's transfer agent, TSX Trust Company, if you are a registered Unitholder or a registered holder of Class B LP Units.
Non-resident Unitholders should receive a Statement of Amounts Paid or Credited to Non-Residents of Canada (“NR4”) with the taxable income reported in box 16 and the non-resident tax withheld shown in box 17.
2025 Special Cash Distribution
On September 15, 2025, ERES declared a special distribution to Unitholders of €0.90 per Unit, paid in cash (the “Special Distribution”). The Special Distribution was paid to Unitholders of record at the close of business on September 22, 2025 (the “Record Date”), with payment on September 25, 2025 (the “Payment Date”). A corresponding €0.90 per unit distribution was declared on Class B LP Units, which was paid to holders of record of the Class B LP Units on the Record Date and paid on the Payment Date.
The Euro-denominated Special Distribution was paid in Canadian dollars based on the foreign exchange rate on the Payment Date, resulting in a Special Distribution payment of C$1.46529. Registered Unitholders were provided with an option to elect to receive the Special Distribution in Euros rather than Canadian dollars. If no such election was made, registered Unitholders were paid the Special Distribution in Canadian dollars based on the above exchange rate mechanism. Beneficial Unitholders did not have an option to elect to receive the Special Distribution in Euros.
For Canadian income tax purposes, the Special Distribution was partially comprised of a return of capital. The remainder of the Special Distribution was principally made to distribute to Unitholders a portion of the net capital gains of ERES realized during the twelve-month period ended December 31, 2025, and was therefore in the form of a capital gain, with a small portion comprising ordinary income. Taxable Canadian-resident Unitholders will generally be required to include their proportionate share of ERES’s net taxable gain and income, as allocated and designated by ERES, in computing their respective income for the tax year that includes the year end of ERES (i.e., December 31, 2025). Unitholders who are not resident in Canada for Canadian federal income tax purposes may be subject to applicable withholding taxes in connection with the payment of the Special Distribution.
ERES cautions that the foregoing comments are not intended to be, and should not be construed as, legal or tax advice to any Unitholder. ERES recommends that Unitholders consult their own tax advisors regarding the income tax consequences to them of this Special Distribution. For more information on the 2025 Special Distribution, including “due bill” trading procedures which were implemented with respect to the Special Distribution, please refer to ERES’s press release here.
2024 Special Cash Distribution
On December 16, 2024, ERES declared a special distribution of €1.00 per Unit, paid in cash on December 31, 2024, to Unitholders of record at the close of business on December 23, 2024.
For more information on ERES’s 2024 special cash distribution, including “due bill” trading procedures which were implemented with respect to the 2024 special cash distribution, please refer to ERES’s press release here