HR-3588-119
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.
Sponsored by Pat Harrigan (R-NC)
What it does
This bill would impose a 50% tax on U.S. real estate purchases made by citizens or entities from countries that prohibit Americans from owning property in those countries ("disqualified countries"). It would require the Secretary of State to annually identify such countries and report them to the Treasury. It would also expand existing IRS reporting requirements so that all real estate purchases by non-citizens — regardless of dollar amount — must be reported, and it would require closing agents, attorneys, or title companies to collect affidavits from buyers confirming they are not subject to the tax.
Who benefits
U.S. citizens who compete with foreign buyers in domestic real estate markets, particularly in high-demand housing markets where foreign purchases are concentrated. Domestic real estate investors and first-time homebuyers who may face less competition. U.S. property owners in markets where foreign demand has driven up prices. Countries that already allow reciprocal U.S. ownership face no new tax, so their citizens buying U.S. property are unaffected. Diplomats and asylum recipients from disqualified countries are explicitly exempted and would not be burdened.
Who is hurt
Citizens and entities from countries identified as "disqualified" — potentially including major U.S. trading partners — who would face a 50% surcharge on any U.S. real estate purchase. Sellers of U.S. real estate who may lose a pool of potential buyers, potentially reducing sale prices or time-on-market in some areas. Title companies, real estate attorneys, and closing agents who would bear new compliance and reporting obligations. Real estate developers who market to international buyers. Entities with as little as 10% ownership by disqualified-country nationals could be swept in, potentially affecting multinational corporations with diverse ownership. Foreign students, workers, and long-term visa holders from disqualified countries who are not U.S. residents and wish to purchase property.
Supporters argue
Supporters argue that the bill applies a straightforward reciprocity principle: if a foreign government bars Americans from owning property in that country, its citizens should not enjoy unrestricted access to U.S. real estate markets. They contend that foreign purchases of U.S. real estate — particularly by state-linked entities — raise national security concerns and contribute to housing affordability pressures, and that the 50% tax creates a meaningful deterrent while leaving open a clear path to removal from the disqualified list if a country changes its own laws.
Opponents argue
Opponents argue that a blanket 50% tax based solely on citizenship — rather than demonstrated national security risk — is a blunt instrument that would penalize ordinary foreign nationals, including long-term visa holders and workers, for their government's policies. They contend that the bill's 10% ownership threshold for entities could inadvertently sweep in large multinational corporations with minor foreign shareholding, creating significant compliance uncertainty and potentially chilling legitimate foreign investment that supports U.S. construction jobs and economic activity.
Constitutional context
The Taxing and Spending Clause (Art. I, §8, cl. 1) grants Congress broad authority to impose taxes, subject to a uniformity requirement. A tax that applies differently based on the buyer's country of citizenship could face a Due Process challenge under the Fifth Amendment if applied retroactively, though the bill's prospective effective date limits that risk. The Origination Clause (Art. I, §7, cl. 1) is satisfied as the bill originates in the House.
Checks and balances
The executive branch (Secretary of State) gains significant gatekeeping power by determining which countries appear on the disqualified list, which directly triggers the tax; Congress retains oversight through the annual reporting requirement, and affected parties could challenge the tax or the list in federal court.
Historical precedent
Several U.S. states (including Florida, Texas, and Montana) have enacted laws restricting or taxing real estate purchases by citizens of specific foreign countries, though no directly analogous federal reciprocity-based real estate tax has previously been enacted.