A Bright Spot for REITs in Gloomy Times: Housing Legislation Relaxes REIT Rules

November 03, 2008
One recent positive development for real estate investment trusts (“REITs”) was the signing into law of the Housing and Economic Recovery Act of 2008. The Act provides flexibility to REITs by relaxing the safe harbor applicable to the 100% tax on prohibited transactions, the limitations on the activities of a taxable REIT subsidiary, and the income and asset qualification tests for REITs. This update summarizes the provisions of the Act that apply to REITs.