The term Real Estate Investment Trust or REIT (rhymes with sweet) originated in the United States in the 1960's as a security that allowed group investment into real estate, either through directly owning property or investing in mortgages. Canadians now use this term to describe trusts where the primary source of income is real estate which are traded on public exchanges such as the Toronto Stock Exchange (TSX). Investors can purchase units of the trust like they would purchase shares of a corporation.

REITs are designed to be a "flow - through entity" (FTE) investment, meaning that the trust pays little or no income tax to the Canada Revenue Agency (CRA). Instead, the unitholder has to pay income taxes. If the units are held by an entity that can defer income tax such as a pension plan or RRSP than there can be a tax advantage. Those unit holders with high marginal tax rates may find REIT distributions are not tax advantageous.