It is a pleasure to see something coming out of Congress these days that seeks to attract foreign investment, instead of repelling it. A recent bill by Representatives Brady and Crowley seeks to modernize FIRPTA by expanding exemptions for foreign pension funds and interest-holders in REITs.
In the 1980’s, FIRPTA exposed foreign investors in U.S. real estate to U.S. income taxes on their gains (and also imposed a withholding regime). Under the proposed bill, the exemption from FIRPTA for up to 5% owners in publicly-traded REITs would be increased to 10%. Foreign pension funds would also be exempted from FIRPTA.
These are not substantial changes to FIRPTA, but at least they are a step in the right direction. The Senate Finance Committee approved a similar bill in February 2015, so there is a reasonable likelihood that this bill may get through Congress.
Press Release, Reps. Brady and Crowley Move to Increase Foreign Investment in U.S.
Real Estate, April 30, 2015