Real Estate Group Sought Treasury Tax Guidance Repeal

Investors are calling for the removal of a 19-year-old tax notice that affects how foreign investments in U.S. property are treated.

Updated on Oct. 1, 2026 in Commercial

Bold flat-color editorial illustration of an engraved brass tax stamp on a granite block, representing U.S. property tax policy. — The Real Estate Roundtable has formally petitioned the Treasury Department to revoke a 19-year-old notice that challenges tax-free distributions for foreign real estate investments. AI Illustration. Upload story photo >

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Should the US government update tax regulations to reflect current foreign investment in real estate?

The Real Estate Roundtable has formally requested that the Treasury Department revoke Notice 2007-55. This guidance, which has been in place for 19 years, notifies the public that the government may challenge certain tax-free real estate trust distributions.

Why it matters

The request aims to update tax policies to reflect modern legal standards and increased foreign capital flows into the U.S. real estate market. Changes to this guidance could shift how tax-free distributions are handled for foreign entities invested in domestic real estate.

The Treasury Department issued Notice 2007-55 nineteen years ago to monitor and challenge specific tax-free distributions. The impact of a potential revocation on individual or institutional tax liabilities remains unknown.

The players

The Real Estate Roundtable

An industry organization that advocates for policies affecting commercial real estate owners and investors.

Scott Bessent

The Treasury Secretary who serves as the lead official overseeing federal tax policy and enforcement.

The details

The Real Estate Roundtable contends that the 2007-era guidance is outdated because of significant shifts in foreign investment taxation laws. By asking Treasury Secretary Scott Bessent to revoke the notice, the group seeks to remove the government's stated intent to challenge these tax-free distributions. This shift could impact how foreign investment trusts manage their U.S. property portfolios and tax obligations.

The Treasury Department issued Notice 2007-55 in 2007.
The Real Estate Roundtable sent the request letter on September 16, 2026.
The letter was released to the public on September 30, 2026.

Money Landscape

This request highlights the ongoing tension between aging tax guidance and modern capital investment trends. It follows a period of growth in foreign investment in U.S. real estate that market participants argue has outpaced the scope of Treasury Notice 2007-55.

Changes to tax-free distribution rules can alter the return profile for properties held by international investment trusts. If you are invested in these vehicles, consult with a qualified tax professional to understand how potential policy shifts might influence your future tax obligations.

The takeaway

The move to repeal a nearly two-decade-old notice underscores how evolving laws may necessitate updates to long-standing federal guidance. Monitor upcoming Treasury Department communications to see if this industry request leads to a change in the enforcement of tax-free real estate distributions.