Lawmakers Target Foreign Land Buyers

In an effort to counter rising foreign ownership of U.S. farmland, Rep. Beth Van Duyne (R-TX) has introduced the Protecting American Farmland Act in the House of Representatives.

This legislation proposes a 60% excise tax on "Countries of Concern" attempting to buy American farm and ranch land. 

According to Ms. Van Duyne, "American farmland – especially here in Texas – is the new frontline in our fight against the Chinese Communist Party’s aggressions. This bill is crucial to keep our farmland from enemy hands, thereby protecting our nation’s farmers, supply chains, and security."

Chairman of the Ways and Means Committee, Jason Smith, echoed Van Duyne's sentiments, stating, "We must protect America’s agricultural resources from being snatched up by foreign adversaries and companies under their control. The bill expands an existing tax on foreign land sales and ratchets up the applicable tax rate by 400 percent, enhancing our food and economic security."

According to Ms. Van Duyne,  China's reported holdings have grown more than 50% since 2019, to approximately 384,000 acres. 

The Protecting American Farmland Act seeks to deter such purchases by imposing an excise tax four times the level of the current withholding tax applicable to foreign sellers of U.S. real property under the Foreign Investment in Real Property Tax Act (FIRPTA).     

FIRPTA is a tax law that imposes U.S. income tax on foreign persons selling U.S. real estate. Under FIRPTA, if you buy U.S. real estate from a foreign person, you may be required to withhold 10% of the amount realized from the sale. The amount realized is normally the purchase price.

The term "Country of Concern" refers to nations with a long-term pattern of conduct adverse to U.S. national security, including China (excluding Taiwan), Russia, Iran, North Korea, Cuba, and the regime of Nicolas Maduro in Venezuela.

Florida Law Challenged

In Florida, the AP reports a group of Chinese nationals have filed a lawsuit against the state challenging a new law that prevents citizens of certain countries, including China, from purchasing property within 10 miles of military installations and other areas deemed "critical infrastructure." This legislation also pertains to agricultural land.

The law predominantly targets citizens of China, Cuba, Venezuela, Syria, Iran, Russia, and North Korea, but those from China and those intending to sell property to Chinese nationals face the most severe penalties.

The American Civil Liberties Union (ACLU) argued that the law could significantly discourage property sales to Chinese and other Asian individuals who are legally eligible to purchase property.

The plaintiffs assert that the law unfairly associates Chinese people with the actions of their government and does not provide evidence that national security risks are tied to Chinese citizens buying property in Florida.

The ACLU, announcing the lawsuit in a press release, argued that the law would "codify and expand housing discrimination against people of Asian descent," violating both the Constitution and the Fair Housing Act. They added, "It will also cast an undue burden of suspicion on anyone seeking to buy property whose name sounds remotely Asian, Russian, Iranian, Cuban, Venezuelan, or Syrian."