NAA/NMHC-supported legislation has been introduced in both the House and Senate (HR 2989 and S 1616) to spur foreign capital into commercial
real estate markets, including multifamily housing, by loosening the Foreign
Investment in Real Property Tax Act (FIRPTA).
The bills would reverse an existing IRS Notice (2007-55) and reinstate earlier rules that allow REIT redemptions and liquidating distributions to be treated as stock sales, exempt from FIRPTA.
They would also double—to 10 percent—the amount of stock a foreign entity could control in a publicly traded REIT without triggering FIRPTA.
Notably, during the 111th Congress in 2010, the House overwhelmingly (402-11) passed legislation similar to the bills, but the full Senate did not take action.