New bill proposes 50% tax on foreign purchases of U.S. land amid housing crisis

Foreign entities are taking advantage of the U.S. real estate market, purchasing properties even as Americans face restrictions on buying land in their countries. Representative Pat Harrigan, R-N.C., is taking action to combat this issue with the introduction of the Real Estate Reciprocity Act. This legislation would impose a 50% tax on real estate purchases by foreign nationals and entities with government ties if their governments do not allow Americans to buy property in their countries.

Harrigan expressed concern over the trend of foreign adversaries buying up American land while American families struggle to afford homes. He emphasized that while these regimes prohibit Americans from purchasing land in their countries, they are freely acquiring land in the U.S. The Real Estate Reciprocity Act aims to put a stop to this by imposing a tax on such purchases, mandating disclosure, and protecting American soil from foreign ownership.

Many countries have strict regulations in place that either completely ban or severely restrict foreigners from buying land within their borders. Nations like Switzerland, New Zealand, Denmark, the Philippines, Poland, and Vietnam have stringent rules governing foreign land ownership. In countries like China and Saudi Arabia, foreigners are not allowed to buy land but can invest in real estate.

Foreign buyers have been accused of driving up housing costs by purchasing high-end properties in cities like New York. This trend has led to concerns about the impact on local housing markets and affordability for American families.

The Real Estate Reciprocity Act is part of a broader effort to address China’s increasing presence in U.S. farmland, particularly in areas near military bases. China currently owns approximately 350,000 acres of farmland spread across 27 states, according to data from the U.S. Department of Agriculture.

As of 2022, foreign entities and individuals collectively hold 43.4 million acres of U.S. agricultural land, accounting for nearly 2% of all land in the country. Canada is the largest foreign holder of U.S. land, with ownership of 12.8 million acres, surpassing the combined land area of New Hampshire and Vermont.

The Real Estate Reciprocity Act seeks to address the imbalance in foreign land ownership by imposing taxes and requiring transparency in real estate transactions involving foreign entities. This legislation aims to protect American interests and ensure that the U.S. real estate market remains accessible to American families.