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Consigliere Files: Senators Propose Offering Visas to Foreign Buyers

Consigliere Files: Senators Propose Offering Visas to Foreign Buyers

by Christopher Moles (Oct 23, 2011)

The Wall Street Journal is reporting that United States Senators Charles Schumer of New York (Democrat) and Mike Lee of Utah (Republican) have introduced a bipartisan immigration reform which would offer special visas to any foreign national who spends $500,000 or more purchasing US residential property. The proposal would constitute a great departure from current policy and it is understandably controversial, but it could be a boon for the housing market. Foreign Investment International investment accounts for much of the present housing market in struggling regions – particularly California, Hawaii, Arizona, and Florida. Wealthy buyers from Asia, South America, and Canada are taking advantage of relatively favorable exchange rates and reduced prices. The US real estate market remains a particularly attractive option for international investors looking to transfer large portions of their personal wealth off-shore and outside the jurisdiction of their own unpredictable governments. However, getting a proper visa remains one of the toughest hurdles for foreign buyers.

The Plan Acknowledging this situation, Senators Schumer and Lee have proposed creating a new visa that would be issued to foreign buyers of US residential real estate. The buyers would have to make at least a $500,000 cash investment into residential real estate and at least $250,000 of the investment would have to go into a single residence (the remaining $250,000 can be invested in multiple properties provided it is done in accordance with other law). Generally, the purchase of any domestic condo, townhome, or detached single family residence will qualify. Congress would issue a new visa that allows the buyer to enter into and remain in the US until they re-sell the subject property. The buyer would be allowed to bring a spouse and any legal dependants under the age of 18. However, the buyer would be required to also obtain a separate work visa if the buyer intends to seek US employment. The proposed new visa would not replace or change any other type of visa. Unlike other visas, the proposed visa would not have a cap on the total number available for issue. The Controversy Of course, this proposal can be expected to face serious hurdles in Congress during this upcoming election year. There are understandable political concerns about homeland security and immigration policy that will lead many in Congress to fight this proposal.

Those issues aside, there is also some controversy within the real estate community. Proponents argue that this action will increase the pool of potential buyers and help the market. They claim the proposal is similar to preexisting visa measures that offer visas to foreign business investors. They also claim that the proposal will help stabilize prices and increase consumer confidence in housing without increasing the federal budget. Others disagree and contend that it is not prudent to give incentives to foreign buyers at a time when most Americans are already not able or willing to compete with foreign offers. American buyers remain the vast, substantial majority of residential property buyers, and many American buyers remain uneasy about purchasing real estate. Some real estate professionals argue that special incentives to foreigners might only cause potential American buyers to back further out of the market.

The Wall Street Journal notes the opposition of Realogy Corp. chief executive Richard Smith. Smith contends that foreign buyers don’t need any extra incentive to buy US real estate. “We have a lot of Americans who are willing to buy.” Smith says, “We just have to fix the economy.” The National Association of Realtors has not issued a stance on this specific proposal. However, NAR states that “NAR [has a] policy supporting the right of foreign nationals to purchase property in the United States and opposing needless barriers to those purchases.” The referenced Wall Street Journal article can be found here.

Source from http://interomojo.com