US Seeking More Foreign Investors
Monday, April 26, 2010
Source: Reuters
Reuters reports: Tax breaks may not be enough of a sweetener to bring foreign buyers back into the flailing U.S. commercial real estate market, where falling rents, rising vacancies, a scarcity of debt financing and lack of property for sale have acted as deterrents.
Congress is considering a move to lower or eliminate U.S. taxes currently imposed on foreign investors of U.S. CRE, where the number of sales has fallen off a cliff over the past two years.
The Real Estate Revitalization Act of 2010 is designed to stir demand by foreigners and in turn lift prices and encourage even more buying by alleviating the U.S. tax burden imposed upon foreign sellers. The number of commercial property deals fell by 55 percent in 2009 after diving 62 percent the previous year.
The Real Estate Revitalization Act of 2010 seeks to unwind some of the provisions under the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA), which imposes U.S. capital gains taxes on foreign sellers of U.S. real estate. Such taxes are not imposed on foreigners who sell U.S. stocks and bonds.
Supporters of the bill say it would put commercial real estate on par with investment in stocks and bonds
"The United States is not playing fair on this issue," said Dan Fasulo, managing director of global real estate research firm Real Capital Analytics. "It has the ability to flush public REITs with billions of additional dollars of capital that will eventually filter down to the direct property market."
View the full article on Reuters: US Seeking More Foreign Investors
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