May 27, 2018

$30B Boost Eyed for Commercial Sector

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$30B Boost Eyed for Commercial Sector

Right before it broke for the holidays last month, Congress passed a big tax bill that includes several provisions NAR backs, most notably one that helps protect underwater home owners from a tax hit when they sell their home in a short sale or have debt forgiven in a loan modification.

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But the bill also includes a number of commercial provisions, including one that analysts say could spur some $30 billion in annual foreign investment in U.S. commercial real estate starting this year. The provision eases tax requirements that were imposed on foreign investors in 1980 as a way to curb their appetite for U.S. commercial real estate.

The bill eases these restrictions in two ways: First, it allows foreign pension funds to own U.S. real property interests without triggering a withholding tax that was part of the 1980 law. Second, it allows overseas investors to own up to 10 percent of a publicly traded REIT, an increase from 5 percent.

You can learn more about these changes in the latest Voice for Real Estate news video from NAR, and background on them can be found at the NAR Government Affairs page on

The Voice for Real Estate video, above, also looks at a slowdown in closings that NAR Chief Economist Lawrence Yun says could be caused by the closing rules that went into effect in October. Other segments in the video look at the registration requirement for hobbyist drones and the potential of an upcoming crowdfunding rule from the U.S. Securities and Exchange Commission to give the real estate industry a boost.

—REALTOR® Magazine