Detail

Bipartisan FIRPTA Repeal Legislation Introduced

  • April 12, 2019

Bipartisan legislation introduced on April 10 by Reps. John Larson (D-CT) and Kenny Marchant (R-TX) would repeal the Foreign Investment in Real Property Tax Act (FIRPTA) – a discriminatory capital gains tax on foreign investors in U.S. real estate.  (Legislative text of the Invest in America Act and one-page summary)

This week, Rep. John Larson (D-CT), above, and Rep. Kenny Marchant (R-TX)  introduced bipartisan legislation, Invest in America Actthat would repeal FIRPTA.

  • FIRPTA's tax penalty does not apply to any other asset class except U.S. real estate.  The arcane tax, enacted in 1980, discourages capital formation and investment that could create jobs and improve U.S. real estate and infrastructure.  By repealing FIRPTA, the Invest in America Act (H.R. 2210) would unlock foreign capital for productive investment. 
  • Rep. Larson stated, “The American Society of Civil Engineers has given America’s infrastructure a D+ rating. That’s unacceptable. This isn’t a Republican or Democrat issue, this is an American issue. I am proud to introduce the Invest in America Act today with Congressman Marchant to unlock more opportunities to invest in communities in Connecticut and across the nation and to rebuild our infrastructure.”  (Larson-Marchant news release, April 10)
  • Rep. Marchant added, “I am proud to partner with Congressman Larson to introduce the Invest in America Act, which will remove the barriers in our tax code that discourage investments in real estate.  By providing parity to real estate assets under the law, foreign investors will be able to create more opportunities and more prosperity for American families."
  • The Larson-Marchant bill (H.R. 2210) was introduced with a total of 11 original cosponsors from the tax-writing Ways and Means Committee who represent every major region of the country.  
  • In 2015, Congress passed meaningful reforms to FIRPTA, exempting foreign pension funds and doubling the amount a foreign interest may invest in a publicly traded U.S. REIT.  (Roundtable Weekly, March 18, 2016)

    A  report by the Rosen Consulting Group  (RCG) estimated that FIRPTA repeal would generate an initial increase of between $65 billion and $125 billion in international investment in U.S. commercial real estate.  

     

  • The Real Estate Roundtable and American Institute of Architects released a statement of support for the Invest in America Act yesterday.  RER President and CEO Jeffrey DeBoer said, "The FIRPTA regime is an anti-competitive outlier that deflects global capital to other countries.  Our infrastructure challenges demand a holistic approach and innovative solutions. Now is the time to build on the recent success of the 2015 reforms by eliminating FIRPTA outright and unlocking private capital for even more job growth and infrastructure improvements."
  • The Roundtable and 19 national trade organizations wrote to Ways and Means Committee Members and other key House lawmakers on March 28, urging them to support the Invest in America Act.  (Coalition FIRPTA letter, March 28)

A report by the Rosen Consulting Group (RCG) estimated that FIRPTA repeal would generate an initial increase of between $65 billion and $125 billion in international investment in U.S. commercial real estate. This new level of activity would lead to the creation of 147,000 to 284,000 jobs throughout the economy and increase taxpayers' income by $8 billion to $16 billion.  (Unlocking Foreign Investment in U.S. Commercial Real Estate, July 2017)