Estate Tax-Federal Estate Tax

www.reit.com The Foreign Investment in Real Property Tax Act (FIRPTA) continues to be an impediment to foreign investment in US REITs, according to James Fetgatter, chief executive of the Association of Foreign Investors in Real Estate. Fetgatter said there are bills in both houses of Congress aimed at amending FIRPTA regulations. “I think reform has some momentum. The most encouraging sign is that people are talking about it,” he said. “I’ve been doing this job for 20 years. FIRPTA has been around for 25 years. I’ve never seen as much buzz about FIRPTA as I have now.” Speaking with REIT.com during The Real Estate Roundtable’s fall meeting, Fetgatter said part of the reason for that is because foreign investors today have a lot of choices where they put their money. “Twenty five years ago, the US was really their only option other than their own country,” he said. “It is a competitive issue now and FIRPTA really puts the US at a disadvantage.” The key reform issue to impact foreign investment in US REITs is raising the threshold before being subject to FIRPTA from 5 percent to 10 percent, and Fetgatter said the language in the proposed bills would address this issue. In general, Fetgatter said foreign investment in US real estate has slowed recently. “Like a lot of US domestic investors, things really slowed down at mid-year when there was a fear of another recession,” he said. “However, there remains a lot of investment coming from Canada and Germany, but Europe has its …

Vern Feller

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