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The recently-enacted Protecting American Taxpayers from Tax Hikes (PATH) Act (H.R. 2029, P.L. 114-113) includes two NAR-supported provisions affecting the Foreign Investment in Real Property Tax Act (FIRPTA) that are estimated to boost significantly foreign investment in U.S. commercial real estate. However, as part of a package of tax changes to offset the cost of the two provisions, Congress also included an increase in the FIRPTA withholding rate from 10% to 15%. But property acquired from foreign persons that is to be used as a personal residence is exempt from the increase if the sales price does not exceed $1 million.
An explanation of the changes to the FIRPTA rules by NAR’s Washington staff was recently released and can be found here.
Questions about the new law can be directed to:
Evan M. Liddiard, CPA (Senior Policy Representative – Federal Taxation), NAR Government Affairs: eliddiard@realtors.org 202-383-1083.
Finley Maxson (Senior Counsel), NAR Legal Department: fmaxson@realtors.org 312-329-8381.