At the end of 2015, the United States reformed its Foreign Investment in Real Property Tax Act, or FIRPTA, in an effort to encourage investment in U.S. property by international pension plans. Through the PATH Act, certain of these pension plans are now exempt from paying taxes on gains from the sale of U.S. real estate, similar to their U.S. counterparts. Furthermore, foreign entities now can increase their holdings in U.S. REITs from 5 percent up to 10 percent without being taxed on the sale of their real property interests.

After a record-setting 2015 for foreign investment in U.S. property, these changes should bring even more international capital into a market in which the “low-hanging fruits are gone,” according to Kye Joon Lee, director – Asia, with Clarion Partners. As many as 80 percent of respondents to the 24th annual survey of the Association of Foreign Investors in Real Estate said it is already difficult to find U.S. real estate opportunities. Still, that