Last Updated May 14, 2019

Law and Practice

Contributed By McGuireWoods LLP

Authors



McGuireWoods LLP has a diverse real estate practice of more than 80 lawyers and land use planners in its offices in Tysons, Charlottesville, Richmond and Norfolk, with skills in a wide range of traditional and non-traditional real estate transactions. The firm’s transactional representation spans all aspects of real estate acquisition, development, financing and disposition, including acquisition, sale, leasing and financing transactions, as well as project finance, construction, public-private partnerships, negotiation of local and state incentives and privatization transactions. The team respresents clients around the world on various sides of such transactions, including Fortune 500 companies. The transactional practice is complemented by the firm’s land use expertise, as it frequently handles zoning and land use matters for development projects.

Foreign passive investors are generally subject to US income tax withholding on their “FDAP” (fixed, determinable, annual or periodic) income, which includes dividends and rents from real property. The 30% withholding rate on FDAP income is reduced if there is an applicable income tax treaty between the US and the foreign investor’s home country. Foreign active investors, on the other hand, are generally subject to the same rates as US taxpayers: 21% for corporations, and 37% for individuals.

When a real estate asset is sold in either an asset deal or an equity deal, tax withholding should be considered regardless of whether the foreign investor is active or passive. The Tax Cuts and Jobs Act imposed additional withholding requirements when a foreign investor sells a partnership interest. Given the heightened concerns on withholding, foreign investors may find it advantageous to invest in US real estate through a “blocker” corporation (including REITs) to alleviate withholding and other tax concerns.

McGuireWoods LLP

1750 Tysons Boulevard
Suite 1800
Tysons, VA 22102-4215

+1 703 712 5000

+1 703 712 5050

info@mcguirewoods.com www.mcguirewoods.com
Author Business Card

Authors



McGuireWoods LLP has a diverse real estate practice of more than 80 lawyers and land use planners in its offices in Tysons, Charlottesville, Richmond and Norfolk, with skills in a wide range of traditional and non-traditional real estate transactions. The firm’s transactional representation spans all aspects of real estate acquisition, development, financing and disposition, including acquisition, sale, leasing and financing transactions, as well as project finance, construction, public-private partnerships, negotiation of local and state incentives and privatization transactions. The team respresents clients around the world on various sides of such transactions, including Fortune 500 companies. The transactional practice is complemented by the firm’s land use expertise, as it frequently handles zoning and land use matters for development projects.

{{searchBoxHeader}}

Select Topic(s)

loading ...
{{topic.title}}

Please select at least one chapter and one topic to use the compare functionality.