H.R. 3588

[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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