FIRPTA 2015: The Benefits

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Foreign investors are already flocking to U.S. commercial real estate. And who can really blame them?

The opportunity, the value being offered is incredible. Just look at the increased appetite for risk, and the fact that markets in San Francisco, Austin and Seattle alone have demonstrated population and job growth, attracting respectable capital interest.

Changes in FIRPTA (Foreign Investment in Real Estate Property Act) are attracting new interest, too.

As I noted here, the changes will now pave the way for increasing, “the maximum stock ownership that a shareholder may hold without the stock being treated as US real property interest (USRPI), as well as increase the percentage ownership threshold that results in treating a distribution to holders of publicly traded REIT stock, attributable to gain from sales of exchanges of USRPI, as a dividend…”

Nowadays, we may see even better things ahead.

Reps. Kevin Brady (R-Texas) and Joseph Crawley (D-New York) just reintroduced a bill to reform FIRPTA, as a companion to S. 915 which received overwhelming approval of 24-0.

According to REIT.com, “Sponsors of the new legislation, the Real Estate Investment and Jobs Act of 2015, say it will allow billions of dollars in new, long-term capital to flow into the U.S. commercial real estate market. The new investment would jumpstart credit markets fund infrastructure projects, and create jobs and economic opportunities, according to its proponents.”