Reps. Kevin Brady (R-TX) and Joseph Crowley (D-NY) introduced a bill on April 30 in the U.S. House of Representatives to reform the Foreign Investment in Real Property Tax Act (FIRPTA).
The bill, which was dubbed the Real Estate Investment and Jobs Act of 2015 (H.R. 2128), was co-sponsored by nearly two dozen House lawmakers from both sides of the aisle. NAREIT commended the legislators for introducing the bill.
“The provisions of this bill will help level the playing field in the global competition for capital, enabling the United States to attract more cross-border investment that will create jobs in the real estate and construction industries, upgrade U.S. commercial real estate and infrastructure, and expand state and local tax bases through increased economic activity,” said Steven A. Wechsler, NAREIT's president and CEO.
FIRPTA was enacted in 1980 to tax non-U.S. investors’ gains on the sale of real property, including real estate and infrastructure assets, a step inconsistent with most other investments by foreigners. The Real Estate Investment and Jobs Act of 2015 would exempt non-U.S. pension funds from the FIRPTA tax penalty. It also would increase the FIRPTA exception for portfolio investors in a publicly traded U.S. REIT from 5 percent to 10 percent ownership of the company’s stock and extend the exception to certain collective investment vehicles.
(Contact: Dara Bernstein at DBernstein@nareit.com)