Foreign investors can now own US real estate without paying US taxes on the sale

The US Treasury is changing how it decides if a real estate investment fund is 'domestically controlled.' This change means more funds will qualify as domestically controlled, even if foreign investors own a large share. This lets foreign investors sell their US real estate holdings without paying US capital gains taxes.

For years, foreign investors who owned US real estate through certain funds had to pay US taxes when they sold their shares. This rule change removes a key barrier for foreign capital looking to invest in US real estate, then exit without a tax hit. It effectively makes US real estate a more attractive, tax-efficient investment for foreign money.