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Obama Abruptly Waives 1980 Foreign Investment in Real Property Tax Act
Submitted by Gordon T. Long of the Financial Repression Authority
Obama Abruptly Waives 1980 Foreign Investment in Real Property Tax Act
The Financial Repression Authority has consistently shown that Regulatory changes which “Ring Fence” US investors choices is a cornerstone of the Macro-Prudential Policy of “Financial Repression”. Through stealth programs like FATCA and PFIC the US government has steadily and quietly limited Americans ability to take cash out of the country and to invest abroad, other than through profitable public exchange traded products sold by the financial industry. However, it is one thing to shut the doors to American investing abroad but it is quite another to fully open the doors to foreigners! It begs the question why, why now and why the change needed to happen so urgently?
This week, as the BOJ, ECB and PBOC all continued to aggressively expand credit the Federal Reserve was “full ahead” in the process of withdrawing approximately $1 Trillion of liquidity to achieve its December FOMC decision to increase the Fed Funds rate by 0.25%. To counteract this policy initiative and the alarming collapse in the HY & IG bond market, the US government immediately opened the floodgates to easy foreign credit in a major policy reversal. A policy decision which was rushed through congress with almost no time for congressional debate. Obviously what was not lost on the White House was the fact that the now troubled $2.2 Trillion of High Yield bonds peddled to yield starved investors since the financial crisis matches 2/3’s of the $3.5 Trillion increase in the Federal Reserves balance sheet during the same period.
FIRPTA was implemented during a better era for Americans in response to international investors in the late 1980s and early 1990s buying U.S. farmland, as well as the more publicly visible buying of trophy U.S. property by the Japanese. The US government has now expediently waived FIRPTA.
President Barack Obama signed into law a measure easing a 35-year-old tax on foreign investment in U.S. real estate, potentially opening the door to greater purchases by overseas investors, a major source of capital since the financial crisis.
Contained in the $1.1 trillion spending measure that was passed to avoid a government shutdown is a provision that treats foreign pension funds the same as their U.S. counterparts for real estate investments. The provision waives the tax imposed on such investors under the 1980 Foreign Investment in Real Property Tax Act, known as FIRPTA.
“FIRPTA has historically made direct investment in U.S. property a non-starter for trillions of dollars worth of foreign pensions,” said James Corl, a managing director at private equity firm Siguler Guff & Co. “This tax-law modification is a game changer” that could result in hundreds of billions of new capital flows into U.S. real estate.
Foreign investors have flocked to U.S. real estate since the global economic meltdown, drawn by the relative yields and perceived safety of assets from office towers and shopping centers to apartments and warehouses. The demand has helped drive commercial real estate prices to record highs. Many foreign investors structured their purchases to make themselves minority investors and bypass FIRPTA.
REIT Purchases
The new law also allows foreign pensions to buy as much as 10 percent of a U.S. publicly traded real estate investment trust without triggering FIRPTA liability, up from 5 percent previously.
“By breaking down outdated tax barriers to inbound investment, the FIRPTA relief will help mobilize private capital for real estate and infrastructure projects,” Jeffrey DeBoer, president and chief executive officer of the Real Estate Roundtable, an industry lobbying group, said in a statement.
Cross-border investment in U.S. real estate has totaled about $78.4 billion this year, or 16 percent of the total $483 billion investment in U.S. property, according to Real Capital Analytics Inc. Pension funds accounted for about $7.5 billion, or almost 10 percent, of the foreign total, according to the New York-based property research firm.
“Foreign pensions are such a low percentage of foreign investment in U.S. real estate because of FIRPTA,” Corl said.
Investment Surges
Foreign investment has surged from just $4.7 billion in 2009, according to Real Capital. Foreign buying this year as a percentage of total investment in U.S. real estate is about double the 8.1 percent average in the 10 years through 2012.
Despite a perception that FIRPTA was a response to the wave of Japanese buying of trophy U.S. property in the late 1980s and early 1990s, including Rockefeller Center and Pebble Beach, the act was actually passed in 1980 in response to international investors buying U.S. farmland. Under old rules, foreign majority sellers had to pay 10 percent of gross proceeds from the sale of U.S. real estate as well as additional federal, state and local levies that could increase the total tax burden to as much as 60 percent, according to the National Association of Real Estate Investment Trusts.
The change “is a huge deal,” said Jim Fetgatter, chief executive of the Association of Foreign Investors in Real Estate. “There’s no question” it will increase the amount of foreign investment in U.S. property, he said.
Warning
The FRA predicts that Americans will face significant increases in US property taxes over the next five years starting in 2016. With the change in FIRPTA Americans should additionally expect property values to increase in 2016-2017.
Clearly, foreigners, the “1%” and property owners will all gain from this, but most Americans will simply face significantly increasing property taxes on elevated asset values to fund the ever increasing government debt burden.
Americans owning a house can be expected to initially focus on their net worth being higher, and not that they once again will have even less disposable income. Some will learn painfully why the number one killer of small business is cash flow, not profits..
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http://www.debtcrash.report/all-posts-list/all-post-list/entry/what-is-a-conspiracy-theory Believe what your eyes can see.
Obama is remaking America in his own image.
Democracy is so "yesterday". Who needs congress. It's not like they cared about liberty anyhow. Rule by decree is the wave of the future. The true path to prosperity.
/sarc
May I have the envelope, please?
And the winner is: the National Association of Realtors.
This is a distinct reason, a cause that should get the people to rise up, in protest, against our own government!
Not a big fan of Obama but hopefully, this will kickstart more investment into real estate here in Las Vegas
www.ViewLasVegasRealEstate.com
Yeah, because this year you should have enough water to get them in the door and then they can die of thirst.
Well, at least Cali is in great shape
California Gov. Brown declares emergency to aid San Bernardino recovery after terror attackhttp://www.upi.com/Top_News/US/2015/12/18/California-Gov-Brown-declares-...
He just needs more of those "Safe Zones".
This will blow the bubble even bigger. More foreign money means pricing out the average American (see Palo Alto for a prime example). More first time home buyers will sign up for non-traditional loans, and the cycle continues.
NO other country allows this because the local people wouldn't tolerate seeing their lands bought up by foreigners. The first rule of sovereignty. But watch the various news people in this dumb country suggest that only racist wouldn't open all US real estate to the highest bidder.
Yes but,,, they're not exceptional like us....
That is correct, even in a 3rd world country like Mexico has many
laws regarding the selling of land and property to foreigners.
Here in Arizona, buyers from the UAE and Saudi are buying up large tracts of farmland that have water rights. They grow a lot of alfalfa and press it into pellets and ship it home.
So, other than some land tax's, the locals are S.O.L., water is scarcer all the time down here and those tracts are pumping down the aquifer, none of it touch's base here in the states. They hire illegals, it's a lose lose for us.
My cousin said lots of A-Rabs are buying those luxury apartments in Houston...not too many locals or Americans buy them only A-rabs.
Moar money laundering I guess.
For some reason the acronym FUBAR keeps popping up in my head over and over again on a daily basis. Must be the weather.
Barry must have a donor buddy w/ a big ranch to sell.
Rumor is most of Hillary's medical problems stem from a secret December 2012 plane crash in Ahzaz Iran.
That and she's 68.
By the way---remember when Reagan was too old to be President at age 69? I suspect Hillary hopes you've forgotten.
Glad I saw this as I was just geting ready to SHORT THE REITS. some of em are trading at ridiculous valuations.
This is a meaningless article about repeal of a meaningless act from a bygone era.
"FIRPTA was implemented during a better era for Americans in response to international investors in the late 1980s and early 1990s buying U.S. farmland, as well as the more publicly visible buying of trophy U.S. property by the Japanese."
The wild frenzy of "new and innovative" global financial products in the late 1990's/early 2000's rendered FIRPTA obsolete in practice. No foreign entity invests directly in U.S. real estate anymore except for private individuals buying private residences. Foreign pension funds etc, invest in U.S. REITS, CDOs, sector funds, and other financial vehicles if they want a piece of U.S. real estate action.
Repeal of FIRPTA means nothing.
There are some hotels out there that would like to get bought....
You want to make it worth the while of Russian entrepreneurs to buy US real estate? Cut Riyadh loose, swallow your pride and pay a fair price for oil.
USDRUB should be no higher than 15. Increase Russian purchasing power fourfold and even Manhattan real estate will look like a bargain.
As it is, Vancouver's still a bargain compared to San Francisco thanks to the low CAD. No prizes for guessing where I'd buy my bug-out.
As a farmer, I fear for this country :(
If you have a lien on your farm and machinery then the note holder has already diced up your debt into chunks and mixed it with debt chunks from other farms and tatoo parlors and Wal-Mart stores to make a Collaterized Debt Obligation sausage, and sold it to investment groups made up of individuals and entities from all over the world.
Independant family farms are now as rare as independant neighborhood bread & milk stores. Multinational corporations and banking behemoths own 90% of everything and have for some time.
Luckily, no debt is involved on my small farm (except for property taxes)
False.
You owe more than that farm is worth in .fedgov notes.
http://www.usdebtclock.org
You, Sledge, I and everyone else don't owe shit. Unless of course you explicity took part in the rape and pillage of America. They could cancel the debt tomorrow and nobody would be worse for wear. It's all keystrokes, nothing more. Welcome to your fake reality.
'
Independant family farms are now as rare as independant neighborhood bread & milk stores. Multinational corporations and banking behemoths own 90% of everything and have for some time.
'
That's why the little badged stalin wannabe's run around and arrest little girls lemonade stands and raw milk farmers (to name a few).
Know your enemy.
Anyone sucking from the public trough a paycheck and violating constitutional/God given rights aka ALL cops is an enemy of God.
And obviously I am talking about God with a big G.
The architect of this universe.
Not the petty psychopathic two faced narcissistic Semitic gods.
Been hoping for a ZH post on the US ag economy. I'm curious as to whether farmers would prefer to have the gubmint out of their business, in other words, an end to all farm programs and just go cold-turkey, sink-or-swim free market.
There is nothing wrong with foreigners buying US real estate .... they bid up the price and pay taxes and aren't a social service drain .... Obama probably waived this to facilitate Muslim immigration ?
Be prepared people, most farmers have dissappeared to corporatacrocy now it's the small business! Rip USA!
Corporations have a right to farm and own farmland .... and indirectly foreign stockholders already own US assets .... specialty farming, hobby farming and family farming can co-exist with corporate farms .... you can't squeal about corporate farms AND high supermarket prices .... unless you're a lefty who doesn't understand Capitalism ?
Bill Clinton was the first .... "Black (Acting) President" .... high yeller (60+ white DNA) mulattto Obama .... was the first .... Muslim president ?
You got that right: You can take the boy out of the mosques (and send him to Hawaii) but you can't take the mosques out of the boy. If a muslim takes his oath of office on a Bible, does that make it moot?
Muslims have a duty to deceive .... in furtherance of the Caliphate .... he was probably crossing the fingers of his other hand .... the one where he sports a Muslim ring .... which people think is his wedding band ?
The main thing I see of interest in this proposal is that it further accelerates the drain of capital away from EMs by offering a new and safer place for money to run to.
If the Fed and the Fathead are now undertaking policies to stimulate the US economy by attracting capital into it, it tells me that things are serious enough to warrant throwing some less-important players off the lifeboat in order to save those who truly count. Definite policy reversal.
Distressed American farmers have a right .... to sell to the highest bidder !
No they don"t, not with the billions that they have recieved with subsidies and crop failure insurance. Sell to non residents, reimburse the American taxpayer for all of those monies. Government has gone full retard.
let's buy all the farmland and ship the crops to China...
Kind of hard to ship land .... but, American farmers have a right to sell to the highest bidder .i.e land and produce ?
"It begs the question why, why now and why the change needed to happen so urgently?"
because there is an imminent crisis on the way?
Anything to inflate the bubble. When do the tricks run out?
"Contained in the $1.1 trillion spending measure that was passed to avoid a government shutdown"
Who says it was passed to avoid a government shut down? WINK, WINK.
Socialist will temporarily jettison their stupid anti-market ideas .... when their power is threatened .... look for mega Mosks and giant Halal farms .... financed by SA et al ?
Just out of interest Monetas,
How old are you? Ball park figure will do.
Are you shy fella?
Come on spill the beans, how old are you? You got me thinking here mind.
I would give Islam a non-religion status .... it's partly a religion .... but, National Socialism, Maoism and Communism are better models .... for how to treat Islam .... as an enemy of our freedom ?
Treat Islam as did Lois Lerner the Tea Party ! LOL
ZH ain't perfect by a stretch, but this is one thing you guys do really well. THIS shit is fucking news. REAL news.
The US just quietly became Greece without so much as a whimper let alone a debate on the issue. That Greek shit played out for YEARS in public to scare the crap out of the peasants. Except the peasants didn't buy it. They went ahead and did it anyway.
Then they pull this shit in the thick of the night while nobody's looking. LMFAO. Representative democracy. Goddamned farce.
The bankers must hang or it is the end of us all.
So another words.....In order to counteract higher interest rates blowing up the debt bubbles of local overspending governments, we will now allow foreigners to run up the real estate bubble even higher, so as to benefit the real estate tax intake of those same overspending local governments.....
I wonder if Obama`s hometown of Chicago, with its huge real estate tax increases, to fend off bankruptcy, could be behind this desperate measure?....Of course when working peoples rent increases faster than their medical insurance premiums, The Washington ruling class will still act befuddled by the electorates angry voting temper tantrums......
Are foreign investors this dumb? Yes, but how long before they "divest", finding themselves unable to collect their rents from the lower-middle class unemployed American?
LOL. Good job Obama. Like a child who's made an awful mess, he throws a towel over it and hopes no one will notice until much later.
They are going to hire Chinese workers of course. Visa given for 10 years to Chinese tourists, dontcha know. It's another scam! USA was just sold to China and it is going to be Trading Places soon.
Paul Ryan put the budget through with SPR Strategic Petroleum Reserves paying... Just saying.... And Bernie killed Audit the FED...
So Us tax payers don't get fees on China controlled Panama Canal and built the Nicaragua Canal..
WE ARE TAXED MORE
Sedition Act of 1918 WAS ONLY FOR TIME OF WAR ....Congress has not declared war....UnF#cking believable GE sells plastic to Saudis not peep.... now simple math gets you "conspiracy" gag
Simple statistics and measurement understanding get you "denier" label
abortion questioner and black baby butcher facts "right wing RACIST hater"
nine month war planning, Building physics, get you tagged "with us or with terrorist "
Gun Control never includes Armies and Authoritarian forces.
WALLS CAN HOLD PEOPLE IN!
STASI GESTAPO NSA "WHAT DIFFERENCE DOES IT make"
Bernie killed audit the fed?
I have heard this but cannot find any evidence of this. In fact, a current audit the fed bill will get floor debate in the coming days. Bernie has actually sponsored many audit the fed bills. He did water one down with a one time disclosure/audit in 2010. Checking his voting record turns up nothing that "Bernie killed audit the fed".
I would be interested in the source of this as it has been claimed but not confirmed.
Web site was blocked by Malwarebytes - but here is caption from Google page:
"
Bernie Sanders destroyed Audit the Fed Bill www.politicalcure.com/2015/.../bernie-sanders-destroyed-audit-the-fed-b...Sep 2, 2015 - Ron Paul's original Audit The Fed bill was gutted by Bernie Sandars before being introduced to the ... In March of 2009 The Federal Reserve Transparency Act of 2009 (H.R. 1207), ... bill in the Senate, but gutted all the power out of it before introducing it for a vote. ... Like · Reply · 6 · Sep 20, 2015 9:44pm."
I checked, too. I thought of the watered down accounting as well. Yet lots of my family and acquaintances hold up the "Envious One" as the answer to their prayers! I intend to inform them, obliquely, at least.
Makes cunts like me wonder why these complete idiots have forgotten just what the meaning of 'Public Service' means.
Just who do these self important utter wastes of space, not just in breathing time, but the sheer cost of their inflated living costs on your fucking backs think they are? Is the term 'In The Public's Interest' of either so little value to cunts like them, or the fact they are so fucking stupid they dont understand it?
And then look at whats unfolding in the scenario at Fukushima, Japan.
This is just for public record. Just wait Mr Obama, Mr Cameron, Mr Hollande, and every last one of you fucking public servant serving yourself first bunch of cunts from them right on down. Just wait till someone, might even be someone just like me decides that targeting civilians doesnt achieve what you thought it would, and decides to nip the cunting problem in the bud.
Who, in the name that is good, do you think you fucking cunts, just who the fuck do you think you are? Dog himself?
Stay tasty you cunts. The reckoning is wandering around you every which way you bastards turn. And I really would bank on that....
;-)
Love your passion Inthemix96 but these pieces of shit are sociopaths; they know exactly what the fuck is going on and zero fucks are given by every single one of them.
He's hoping to fend off the huge real estate crash to come. It won't help. This time, we pions won't be the huge losers - the people who bought those 10,000 sq ft plus vanity properties for 10 million and up and those who purchased normal sized apartments in major metropolitan areas for millions of dollars are about to get F*U*C*K*E*D!!!
The Chinese look at drone footage in deciding which Palo Alto ranch to buy. They routinely spend $50 million like it was a 1 story brick house in Toledo. This will be a big help. All in a days work to "fundamentally transform" America.
Can hardly wait to see what HC will do as president!
https://www.lewrockwell.com/2015/12/anne-williamson/worst-female-killer-history/
I wonder which islamic twat wants to buy more US property that prompts this from 0bama?
You people are constantly pointing in the wrong direction, intentionally. Diverting attention away from the truth. No comment thread is spared from "It was ~them~" those darn "muzzies."
"Immigrant investors, once a trickle, have rapidly grown in numbers as applicants like Chinese businessman Fuxue “Frank” Gong use the EB-5 visa program to establish a foothold in the U.S."
"The number of immigrant investors, once a trickle, has mushroomed: For the first time since Congress created the EB-5 visa in 1990, the program in 2014 reached its cap of about 10,000 visas, counting investors and family members. The government last year approved petitions from investors who collectively put up more than $2.5 billion, according to IIUSA, the trade group for the EB-5 industry.
The backlog has reached record levels, too: Last year there were 12,453 petitions worth an estimated $6.2 billion in investment awaiting approval, compared with 514 petitions pending at the end of 2009. Chinese investors dominate the EB-5 visa program. Some credit former Gov. Gary Locke with boosting its growth. Though the EB-5 program isn’t restricted to building projects, almost all immigrant investors prefer to put their cash into real-estate development."
Millionaires created out of sweatshops is what you'll find.
That sounds like you would be buying products from sweatshops, too. I had a look at the trade figures on census.gov and found that Chinese Imports are always 4 times American Exports. Who's buying all this stuff? This law change may address some of that trade imbalance, maybe that's why he did it. Now the Chinese millionaires need confidence in the US real estate market.
Seeing as my temper wont calm down, and after quiet reflection, seeing as yes, Inthemix doesnt matter no more, you didnt think people like said Inthemix would give a second thought to what you lot have done, in my fucking name, you just expected people like me to keep on, keeping on. Say nowt, and keep you fuckers in the life you think wont ever change, at my cunting expense.
You had no idea at all that Inthemix, and many fucking countless millions just like him would wise right the fuck to the games you play in all our collective names did you? You didnt even have the sense to realise people, just like me figured you didnt only fuck us properly, but we would sit back after now knowing what we collectively know, and allow you to do it to our, indeed Inthemixes children did you?
If you did do that, you are even stupider than this idiot thought, namely me. You may, right at this point have no idea of the damage you have caused, including and up to the debacle at Fukishima. But as Dog as my witness, I cannot allow this same fate to befall me two kids who had nothing to do with anything we as a collective allowed in our names, no matter how much we knew, or didnt.
You will, in all honesty have to kill me first. Pass that on NSA, GCHQ. You were given fair warning some time ago, its now time for reflection, and asking yourselves, is it really worth it. You are asking very fair minded people in normal circumstances to do extra-ordinary things under duress. You will as ever be found wanting.
And just this once, for all time, the truth is known, and truth is owt.
Dog help anyone on the wrong side of this hiding.
;-)
This was passed in 1980 which means it was one of Jimma Carter's. Sounds like the guy. Japan was buying our precious landmarks - the Empire State Bldg. among them. Didn't he want to ban soybean exports to Japan when the prices were rising? What a micromanaging douche.
Good news! Carter is cancer free.
Sure seems like it would be much more difficult for money to leave as well, especially if they undo the .25 and go neg.
Didn't Wookie take a shining to gardening?
Time for moar bribes
(er election funding)
West has legalized corruption in the name of election funding
https://en.wikipedia.org/wiki/Floyd_Brown#References
"Brown was one of the co-founders and remains the Chair of Citizens United – yes, that Citizens United. In addition to being a Reagan administration advisor, he was a prominent advisor on the Dole, Forbes and W. Bush presidential campaigns. He is the person credited with creating the now-infamous Willie Horton television ads. He worked with the McCain campaign to create anti-Obama messaging and advertisements in 2008. Brown, in other words, is not some remora sucking on to the GOP establishment, he is the GOP establishment – or at least, he is and has been just as much of that establishment as anyone else over the past twenty-five years."
http://ordinary-gentlemen.com/blog/2013/09/19/california-dreaming-a-look...
Citizens United v FEC is another example of conspire to create a problem to create solution.
Imaging the loan fraud potential for home values in Detroit if every Nigerian could live here and get an FHA loan.
That 5 trill 2008 collapse figure will be traded for a 2020 100T fraud figure, all by immigrants and refugees.
Stories like this remind me why I like ZH. This is big news. This is basically a tax cut for all foreign investors in US Real Estate, makes it easier to launder money in US real estate, AND removes some reportng requirements from FIRE professionals.
Fucking foriegn institutional buyers around the globe are breaking out the Dom. This is like free fucking money and basically turns the US into Monopoly for them. Bonuses in 2016 wil e awesome. Why? Because some bright boys in the US banks know there aren't many qualified buyers in the US these days. So need to bring some of that hot money around the world back into the US.
Fuck me....and just when I expected 2016 to be a cooling off period for US real estate. I expect you will see a wave of money flooding into the US for high quality institutinal RE assets (Class A office, Apartment buildings, Light Industrial, Trophy Office Properties).
Feinstein's husband is going to easily earn another 2-3 billion in commissions this year. Either he has a serious gambling problem or he likes professional women and drugs, because I have no idea what you do with so much money - even Charlie Sheen couldn't handle that kind of endless money. http://www.newsmax.com/US/Dianne-Feinstein-Post-Office-sale-Richard-Blum...
Course, if I had to wake up to that evil cunt Feinstein every morning I'd be working 24 hours a day too.
There is a shedload of hot money in the Middle East looking for a home. It appears the US will be that home. I only see dollar strength and increasing RE Asset prices from this. Gold will take a ripsaw in the ass as Indian and Chinese buyers buy US real estate instead of gold they need to guard and worry and can't insure as easily as a RE investment.
Wow! Brilliantly evil $hit. They never cease to amaze.
Wow! Brilliantly evil $hit. They never cease to amaze.