Senate Finance Committee Reports on Tax Reform Include FIRPTA Measures Endorsed by NAREIT

The Senate Finance Committee published reports from its tax reform working groups on July 8, which include REIT-related provisions backed by NAREIT.

The international working group called for revisions to the Foreign Investment in Real Property Tax Act (FIRPTA), noting that the FIRPTA rules discourage cross-border investment in U.S. infrastructure. The co-chairs of the international group, Sens. Rob Portman (R-OH) and Charles Schumer (D-NY), said tax reform should include the FIRPTA measures from the NAREIT-endorsed Real Estate Investment and Jobs Act of 2015 (H.R. 2128):

• Increase the ownership stake that a foreign investor can take in a U.S. publicly traded REIT without triggering FIRPTA liability by increasing the FIRPTA exemption for portfolio investors in a U.S. publicly traded REIT from 5 percent to 10 percent; and
• Improve tax parity and put foreign pension funds on a level playing field with domestic pension funds by exempting foreign pension funds from FIRPTA.

NAREIT wrote to Senate Finance in April with its perspectives on tax reform.

(Contact:  Dara Bernstein at dbernstein@nareit.com)