US investors can, of course, recover the taxes paid to Canada by filing a Form 1116 on their US taxes or by filing a Form NR7-R with the Canadian government by going to the Web site http://www.ccra.gc.ca/. Even if you don’t attempt to recover the withholding, however, the average post-withholding dividend of my picks is still 7.3 percent, versus just 4 to 5 percent for the typical high-quality US REIT.

The real advantage kicks in when it comes to US taxation. US REIT dividends typically come in two parts: a small piece derived from capital gains and losses due to property sales and a much larger piece from pre-tax cash flows that’s considered “ordinary income” for tax purposes and thereby taxed at an individual’s top rate unless held inside an IRA.

In contrast, Canadian REITs are considered “qualified corporations” as far as the IRS is concerned. The entire distribution is taxed at a maximum rate of just 15 percent, provided they’re owned for the length of time prescribed in the Bush Tax Act. In contrast, only the capital gains portion of US REITs’ income enjoys the preferential 15 percent tax rate. Consequently, the after-tax yield advantage of Canadian REITs over US REITs is even greater.