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ADISA Supports Relief from Foreign Investment in Real Property Tax Act

Nov 19, 2014

Relief from the act is expected to create jobs and stimulate investment in U.S. commercial real estate
 
ADISA has joined a coalition of 15 leading real estate trade associations in support of an ongoing legislative effort aimed at finding relief from the Foreign Investment in Real Property Tax Act (FIRPTA). The real estate trade association coalition submitted a letter to U.S. Senate Majority Leader Harry Reid and U.S. Senate Republican Leader Mitch McConnell urging the leaders to include a proposal made by U.S. Senators Robert Menendez and Mike Enzi in the legislative agenda for the remaining days of Congress. 
 
The proposal by Senators Menendez and Enzi asks legislation to remove the tax penalty that FIRPTA imposes on foreign pension funds that invest in U.S. real estate and infrastructure. It also requests to increase the ownership stake a foreign investor can take in a publicly traded company whose assets consist largely of U.S. real property without triggering FIRPTA liability. Moreover, the proposal seeks to extend the provision to certain collective investment vehicles. Relief from the act is expected to create jobs and stimulate investment in U.S. commercial real estate.
 
The proposal for relief from FIRPTA is a modified version of the Real Estate Investment and Jobs Act (S.1181) and was filed as an amendment by 10 Finance Committee members during committee consideration of the highway bill.  
 
The letter from the coalition states, “Combined, its provisions should serve as a strong, market-driven catalyst for putting Americans back to work modernizing U.S. commercial real estate and repairing our nation’s crumbling infrastructure.”
 
“Reforming FIRPTA will lead to an increase in foreign investment in U.S. real estate or infrastructure, bringing in new private capital that will not only support investments across the nation, but create jobs as well,” said John Harrison, chief executive officer and executive director of ADISA. “The proposal by Senators Menendez and Enzi has received widespread bipartisan support from both the House of Representatives and the Senate, and ADISA couldn’t be more pleased to be a part of this coalition to further these efforts.”
 
Members of the coalition include:
 
  • Alternative & Direct Investment Securities Association
  • American Hotel & Lodging Association
  • American Resort Development Association
  • Building Owners and Managers Association International
  • CCIM Institute
  • Institute of Real Estate Management
  • International Council of Shopping Centers
  • International Union of Painters and Allied Trades
  • Investment Program Association
  • NAIOP, Commercial Real Estate Development Association
  • National Apartment Association
  • National Association of Real Estate Investment Trusts
  • National Association of Realtors
  • National Multifamily Housing Council
  • The Real Estate Roundtable