Senate Committee Approves FIRPTA Provision; CHP Tax Credit

Senate Committee Approves FIRPTA Provision; CHP Tax Credit

By:  Erika Morphy

The Senate Finance Committeeapproved a part of the reform measure to the Foreign Investment in Real Property Tax Act in a markup on Wednesday.

Specifically, it approved a proposal to double the FIRPTA free investment that a foreigner can make in a publicly traded REIT to 10%. The committee did not approve a part of the proposal that would allow foreign tax exempt pension funds to invest in US without FIRPTA. However, as one of the bill's sponsors, Senator Bob Menendez (D-NJ), said during the markup, support is building for that particular provision. "The exclusion of the pension provision in this markup does not mean it is controversial in any way," he said, noting that it has bipartisan support and was included in President Obama's budget. Indeed, Sen. Rob Portman (R-Ohio) pointed out during the markup that FIRPTA was originally put in place in reaction to the Time magazine article fretting about Japan Inc.'s growing ownership of US property.

Going forward, Menendez also said, he "intends to seek comprehensive relief for obstacles" that foreign investors face when they place money in the US.

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