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The new tax law recently signed by President Obama will do a lot of good for the US real estate industry, former Congressman and current real estate executive Rick Lazio says.
The Foreign Investment in Real Property Tax Act (FIRPTA)—which used to cap foreign investments in REITs at 5%—raised the limit to 10%, a change that could spur a $4.2B cash influx over the next decade.
The new rules present “the most significant reforms of FIRPTA since its enactment in 1980,” Real Estate Roundtable president and CEO Jeff DeBoer says. DeBoer co-sponsored the bill with Rep. Joseph Crowley, both of whom will be at Bisnow's New York Foreign Investment conference on Jan. 19.
The new law also extends deductions for energy-efficient commercial and multifamily buildings that come on line before a new Jan. 1, 2017, deadline.
There’s also a tweak to the formula that determines the amount of a lesser-known low-income housing tax credit. The newly changed provision will guarantee investors a minimum 9% tax credit for qualifying projects.
Then there was the much-ballyhooed EB-5 program, which was extended till September. Although the EB-5 tug-of-war is far from over, the extension should allow for a continued stream of investments. For now, anyway. [CO]
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