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Foreign Investment in Real Property Tax Act of 1980 (FIRPTA)

The U.S. is among the world’s favorite places to invest, and these investments strengthen our economy by driving growth and helping to create new jobs.

Yet today, the U.S. tax code actively discourages investment from overseas in one of the places where it could have a tremendous economic impact – the commercial real estate industry, which today represents thirteen percent of U.S. GDP by revenue and generates or supports over nine million American jobs.

During the American farm crisis more than thirty years ago, Congress introduced legislation to discourage overseas investors from buying American cropland. But when it became law, the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) imposed a 35% capital gains tax on international investors with an interest in any type of U.S. commercial property.

This punitive tax remains a significant barrier to new investments that could help America grow. Today, Congress singles-out no other asset class or industry for such negative tax treatment.

Meanwhile, the already-fragile commercial real estate market has more than $2.4 trillion worth of loans expected to mature by 2018. These loans are held by insurance companies, thrifts, banks and in commercial mortgage-back securities. Borrowers will need to secure new funding options or risk foreclosure, leaving communities with even more vacant storefronts, lost jobs, lower tax revenues and a deeper economic hole.

Reforming FIRPTA will inject new, long-term capital into the U.S. commercial real estate market, boosting a vital sector of American business and reducing the potential risk of widespread commercial defaults reverberating throughout our economy.

You can help ensure FIRPTA reform is successful by joining our coalition.