A highly discussed topic in real estate currently in many countries including Germany and the UK is the introduction of tax transparent investment vehicles commonly referred to as Real Estate Investment Trusts (REITs). The UK government published a consultation paper alongside the 2004 Budget to consider reforms in the UK property market and in particular to reform the tax treatment of property investment in the UK. Reform of the tax treatment of property investment is expected to improve liquidity, transparency and scrutiny, provide access to property for long-term savings, and expand the private rented market. Therefore, the UK Government has expressed its commitment to the introduction of Real Estate Investment Trusts (REITs), such as those common in many developed property markets around the world. The key stated aim for UK REITs has been to ensure that the returns from different forms of direct or indirect UK property investment are taxed in broadly the same way. However, three key challenges in the tax treatment of the UK REIT model, relating to non-UK resident investors, borrowing and group structures have yet to be although policy options have been suggested. This paper looks at the ways other leading economies with REIT-type vehicles already in place, in particular the US, the Netherlands and France, have dealt with the aforementioned key issues in the tax treatment of their REIT models and examines the alternative models available to date. This paper argues that the UK should follow a modification of the ëexempt company modelí.