Changes to Tax Legislation Regarding U.S. Real Estate Investments


In December 2015, the U.S. government revised the tax treatment of property investment for foreign investors, including Canadian pension plans, through changes to FIRPTA.
Prior to modification of FIRPTA, gains from the sale of real estate assets in the United States were subject to different taxes that reduced net returns earned by foreign investors, including Canadian pension plans.  It is our understanding that subject to clarification by the U.S. authorities, effective as of its adoption by the Obama administration on December 18, Canadian pension plans will no longer be subject to such taxes.

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Changes to tax legislation regarding U.S. real estate investments (“Foreign Investment in Real Property Tax Act” or “FIRPTA”)