Skadden Arps reports that, on February 11, 2015, the Senate Finance Committee unanimously approved a significant reform to the Foreign Investment in Real Property Tax Act (FIRPTA). The proposal demonstrates the continued bipartisan legislative commitment to reforming FIRPTA and attracting additional foreign capital to the U.S. real estate market, going back to the 2010 passage of a similar FIRPTA reform bill, H.R. 5901, by the House by a 402-11 vote.
According to Skadden, FIRPTA taxation functions as a substantial deterrent to foreign investment in the U.S. real estate industry, driving foreign capital to instead invest in other U.S. industries or in real estate opportunities in other countries. The FIRPTA reform provisions of this bill address this problem by reducing some sizeable barriers to foreign investment. This bill represents a substantive, bipartisan FIRPTA reform that will generate significant foreign investment in U.S. REITs, providing REITs with the equity necessary to upgrade and renovate properties, revitalize neighborhoods and create U.S. jobs.
Read Skadden’s summary of the proposal at “Senate Finance Committee Takes Unanimous Step Toward FIRPTA Reform” | Skadden, Arps, Slate, Meagher & Flom LLP – JDSupra.