[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3588 Introduced in House (IH)]
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119th CONGRESS
1st Session
H. R. 3588
To amend the Internal Revenue Code of 1986 to require all real estate
purchases by non-citizens to be reported to the Internal Revenue
Service, to impose a tax on the purchase of real estate purchases by
certain non-citizens, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 23, 2025
Mr. Harrigan introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committee on
Foreign Affairs, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to require all real estate
purchases by non-citizens to be reported to the Internal Revenue
Service, to impose a tax on the purchase of real estate purchases by
certain non-citizens, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Real Estate Reciprocity Act''.
SEC. 2. RETURNS WITH RESPECT TO FOREIGN PERSONS HOLDING DIRECT
INVESTMENTS IN UNITED STATES REAL PROPERTY INTERESTS.
(a) Required Return.--Section 6039C(a) of the Internal Revenue Code
of 1986 is amended by striking ``To the extent provided in regulations,
any'' and inserting ``Any''.
(b) Dollar Threshold Removed.--Section 6039C(b) of such Code is
amended by striking ``during any calendar year if--'' and all that
follows through the period and inserting ``during any calendar year if
such person did not engage in a trade or business in the United States
at any time during such calendar year''.
(c) Effective Date.--The amendments made by this section shall
apply to returns filed with respect to taxable years beginning after
the date of the enactment of this Act.
SEC. 3. REPORT ON FOREIGN PROHIBITION OF UNITED STATES OWNERSHIP OF
REAL PROPERTY INTERESTS.
Not later than 60 days after the date of the enactment of this Act,
and annually thereafter, the Secretary of State shall provide to the
Secretary of the Treasury a report describing all foreign countries
that prohibit the purchase or ownership of real estate by citizens of
the United States.
SEC. 4. IMPOSITION OF TAX ON THE ACQUISITION OF UNITED STATES REAL
PROPERTY BY DISQUALIFIED PERSONS.
(a) In General.--Subtitle D is amended by inserting after chapter
50A the following new chapter:
``CHAPTER 50B--ACQUISITION OF UNITED STATES REAL PROPERTY BY
DISQUALIFIED PERSONS
``Sec. 5000E. Imposition of tax on acquisition of United States real
property by disqualified persons.
``SEC. 5000E. IMPOSITION OF TAX ON ACQUISITION OF UNITED STATES REAL
PROPERTY BY DISQUALIFIED PERSONS.
``(a) In General.--In the case of any acquisition of any United
States real property by any disqualified person, there is hereby
imposed on such person a tax equal to 50 percent of the amount paid for
such interest.
``(b) Disqualified Person.--For purposes of this section--
``(1) In general.--The term `disqualified person' means--
``(A) any citizen of a disqualified country (other
than a citizen, or lawful permanent resident, of the
United States),
``(B) any entity domiciled in a disqualified
country,
``(C) any disqualified country and any political
subdivision, agency, or instrumentality thereof, and
``(D) except as provided in paragraph (3), any
entity if persons described in subparagraph (A), (B),
or (C) (in the aggregate) 10-percent control such
entity.
``(2) Disqualified country.--The term `disqualified
country' means any country identified in the report described
in section 3 of the Real Estate Reciprocity Act.
``(3) Exception for certain non-citizens.--An individual
shall not be treated as described in paragraph (1)(A) if such
individual resides in the United States during the taxable year
due to--
``(A) diplomatic obligations, or
``(B) a grant of asylum by the United States.
``(4) Exception for certain publicly traded corporations.--
``(A) In general.--An entity shall not be treated
as described in paragraph (1)(D) if--
``(i) such entity is a specified publicly
traded corporation, or
``(ii) specified publicly traded
corporations (in the aggregate) control such
entity.
``(B) Specified publicly traded corporation.--
``(i) In general.--The term `specified
publicly traded corporation' means any
corporation if--
``(I) the stock of such corporation
is regularly traded on an established
securities market located in the United
States, and
``(II) specified disqualified
persons do not (in the aggregate)
control such corporation.
``(ii) Specified disqualified persons.--The
term `specified disqualified persons' means,
with respect to any corporation referred to in
clause (i), any person which--
``(I) is described in subparagraph
(A), (B), or (C) of paragraph (1), and
``(II) 10-percent controls such
corporation.
``(c) Prorated Tax on Acquisitions by Entities Not More Than 50
Percent Controlled by Disqualified Persons.--
``(1) In general.--In the case of any disqualified person
described in subsection (b)(1)(D) with respect to which persons
described in subparagraphs (A), (B), or (C) of subsection
(b)(1) do not (in the aggregate) control such disqualified
person, subsection (a) shall be applied by substituting `the
applicable percentage of the amount' for `the amount'.
``(2) Applicable percentage.--For purposes of this section,
the term `applicable percentage' means, with respect to any
disqualified person to which paragraph (1) applies, the highest
percentage which could be substituted for `50 percent' both
places it appears in section 954(d)(3) without causing persons
described in subparagraph (A), (B), or (C) of subsection (b)(1)
(in the aggregate) to control (determined by taking into
account such substitution) such disqualified person.
``(d) Control.--For purposes of this section--
``(1) In general.--The term `control' has the meaning given
such term under section 954(d)(3), determined by treating the
rules of section 958(a)(2) as applying to both foreign and
domestic corporations, partnerships, trusts, and estates.
``(2) 10-percent control.--The term `10-percent control'
means control (as defined in paragraph (1)), determined by
substituting `10 percent' for `50 percent' both places it
appears in section 954(d)(3).
``(e) United States Real Property.--The term `United States real
property' has the meaning which would be given the term `United States
real property interest' by section 897(c) if--
``(1) paragraph (1)(A)(ii) were applied by substituting
`such corporation was not a United States real property holding
corporation at the time of acquisition' for `such corporation'
and all that follows,
``(2) paragraph (1)(B) did not apply, and
``(3) paragraph (3) were applied by substituting `at the
time of acquisition' for `at some time during the shorter of
the periods described in paragraph (1)(A)(ii)'.''.
(b) Reporting Requirements.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61 is amended by adding at the end the following new
section:
``SEC. 6050AA. RETURNS RELATING TO ACQUISITION OF UNITED STATES REAL
PROPERTY BY DISQUALIFIED PERSONS.
``(a) In General.--The required reporting person, with respect to
any acquisition of any United States real property by a presumptively
disqualified person to which section 5000E(a) applies, shall make a
return at such time as the Secretary may provide setting forth--
``(1) the name, address, and TIN of such presumptively
disqualified person,
``(2) a description of such United States real property
(including the street address, if applicable), and
``(3) the amount paid for such United States real property.
``(b) Statement To Be Furnished to Presumptively Disqualified
Person.--Every person required to make a return under subsection (a)
shall furnish, at such time as the Secretary may provide, to each
presumptively disqualified person whose name is required to be set
forth in such return a written statement showing--
``(1) the name and address of the information contact of
the required reporting person, and
``(2) the information described in paragraphs (1), (2), and
(3) of subsection (a) which relates to such disqualified
person.
``(c) Required Reporting Person.--For purposes of this section, the
term `required reporting person' means, with respect to any acquisition
of any United States real property--
``(1) the person (including any attorney or title company)
responsible for closing the transaction in which such United
States real property is acquired, or
``(2) if no one is responsible for closing such transaction
(or in such other cases as the Secretary may provide), the
transferor of such United States real property.
``(d) Presumptively Disqualified Person.--For purposes of this
section, the term `presumptively disqualified person' means any person
unless such person furnishes to the required reporting person an
affidavit by the such person stating, under penalty of perjury, that
such person is not a disqualified person (as defined in section
5000E(b)).
``(e) Requirement To Request Affidavit.--If the required reporting
person, with respect to any acquisition of any United States real
property, has not, as of the time of such acquisition, been furnished
the affidavit described in subsection (d) by the acquirer of such
interest, such required reporting person shall furnish to such
acquirer, at such time, a written statement informing such acquirer of
the required reporting person's obligation to make the return described
in subsection (a) with respect to such acquisition and including such
other information as the Secretary may require.
``(f) United States Real Property.--For purposes of this section,
the term `United States real property' has the meaning given such term
in section 5000E.''.
(2) Penalties.--Section 6724(d) is amended--
(A) in paragraph (1)(B), by striking ``or'' at the
end of clause (xxvii), by striking ``and'' at the end
of clause (xxviii) and inserting ``or'', and by adding
at the end the following new clause:
``(xxix) section 6050AA(a) (relating to
returns relating to acquisition of United
States real property by disqualified persons),
and'', and
(B) in paragraph (2), by striking ``or'' at the end
of subparagraph (KK), by striking the period at the end
of subparagraph (LL) and inserting ``, or'', and by
inserting after subparagraph (LL) the following new
subparagraph:
``(MM) subsection (b) or (e) of section 6055AA
(relating to statements relating to acquisition of
United States real property by disqualified
persons).''.
(c) Clerical Amendments.--
(1) The table of chapters for subtitle D is amended by
inserting after the item relating to chapter 50A the following
new item:
``Chapter 50B. Acquisition of United States Real Property by
Disqualified Persons.''.
(2) The table of sections for subpart B of part III of
subchapter A of chapter 61 is amended by adding at the end the
following new item:
``Sec. 6050AA. Returns relating to acquisition of United States real
property by disqualified persons.''.
(d) Effective Date.--The amendments made by this section shall
apply to acquisitions in taxable years beginning after the date of the
enactment of this Act.
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