Real Estate Reciprocity Act

HR 3588, the Real Estate Reciprocity Act, imposes a 50% tax on foreign individuals or entities purchasing U.S. real estate from countries that restrict U.S. citizens from owning property there. It requires the State Department to annually report such countries to the Treasury, which then identifies "disqualified persons" (foreign citizens/entities from those countries) subject to the tax. Key mechanisms include mandatory transaction reporting by title companies or attorneys, an affidavit requirement to verify eligibility, and exclusions for diplomats, asylum seekers, and publicly traded corporations. The tax applies to acquisitions starting in the taxable year after enactment, directly affecting foreign buyers from designated countries. The bill’s title is misleading, as it creates a unilateral tax based on foreign restrictions, not mutual reciprocity.