By Vicki Needham - 07/30/10 04:42 PM EDT
Bill sponsor Rep. Joseph Crowley (D-N.Y.), has argued his proposal will open revenue streams to real estate investments that continue to suffer in the current economic climate.
The Real Estate Jobs and Investment Act raises the cap on foreign capital in REITs from 5 percent to 10 percent. The increase follows the approach taken in previously negotiated U.S. tax treaties with other countries when the treaty looks through to individual investors.
The bill removes a surtax that foreigners pay when investing in U.S. real estate, putting them on equal footing with domestic taxpayers.
However, foreign investors owning more than 10 percent in one real estate investment would still pay the surtax and will have to register with the Securities and Exchange Commission.