07/10/2015

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)

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