There is something very interesting unfolding. Part of the new year-end spending bill included a waiver of the Foreign Investment in Real Property Tax Act (FIRPTA) which had been implemented during the late 1980s when the Japanese were buying everything. They claimed to have focused on buying U.S. farmland, but it also applied to buying of trophy U.S. property like Rockefeller Center in New York City.
This position has been reversed in the new year-end spending package. While some attribute this to a grand conspiracy giving far more credit to those in Congress and in the White House than they deserve, our sources simply tell the plain story of lobbying to allow foreign buyers who are supporting the real estate market in key areas. Especially after London basically kicked everyone out of town who were foreign telling them their money was not welcomed, with lightening speed they instantly turned to New York City.
High properties even in Florida are being sold to the Chinese largely in cash deals whereas Canadians are buying the greatest number of properties. The lobbying has been from the real estate and banking industry who see a market they want to service. Slipping this into the $1.1 trillion spending measure that was passed to avoid a government shut down, included tax breaks for Americans and simultaneously treats foreign pension funds the same as Americans. There has been lobbying also from foreign pension funds because they see no hope in Europe and have been pleading to be allowed to enter the US market in a big way. For the first time this provision waives the tax imposed on foreign investors under FIRPTA.