Buy a house, get a visa?
Two senators propose granting special visas to foreigners who spend $500,000 on U.S. homes. But would the plan lure any additional international investors?
Two U.S. senators have a plan to boost the housing market: give visas to foreigners who buy U.S. homes.
A bill introduced by Sen. Charles Schumer, D-N.Y., and Sen. Mike Lee, R-Utah, would create a new kind of visa for foreigners who spend $500,000 on U.S. real estate. That could be one $500,000 primary residence house or one $250,000 primary residence and additional rental property.
The visas would not provide a path to a green card and permanent residency and would not allow the foreigners to work here. The proposal is part of a bill to streamline visa requirements for foreign visitors.
The idea apparently stemmed from the E-5 investor visa, which is granted to foreign investors who create jobs.
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Even without a visa as a bonus, U.S. real estate is attractive to foreigners. According to the National Association of Realtors, foreign buyers purchased 244,000 homes in the year ending in March. In areas such as Los Angeles and Miami, foreign buyers are a significant slice of the market.
The new homebuyer visa would require the foreign investor to live in the home at least 180 days a year and pay U.S. taxes, though it would not grant him or her the right to work. Buyers could bring spouses and children. They would have to pay cash for the homes and pay more than the property is valued by the local property appraiser, though not all states value property at market value.
"This bill supports a free-market method for increasing demand for housing at a time when so many working-class Americans are underwater on their homes, are desperate for prices to rise again, and big-government programs have failed to work," Lee said in a news release. "I am sponsoring this bill because I know that it makes economic sense while protecting American citizens."
Whether offering visas to foreign homebuyers would provide any noticeable boost to the housing market is debatable.
Sandra Miller, a real-estate broker in Santa Monica, Calif., estimates that international clients make up 10% of luxury property buyers. Offering them visas could triple their numbers, she said. "Florida, New York, Colorado, Hawaii and Texas — those states will see a huge increase in demand," she told the Los Angeles Times.
But Richard Smith, chief executive of Realogy Corp., which owns Coldwell Banker and Century 21, doesn't see any benefit to the proposal.
Foreign buyers "don't need an incentive," he told The Wall Street Journal. "We have a lot of Americans who are willing to buy. We just have to fix the economy."
What do you think? Should the U.S. offer foreigners visas as an incentive to buy homes here?
Finally, people get the idea. Yes, buy Made in the USA! Not!!! They are just buying up our homes to invest into their own pockets. Foreigners aren't buying the American dream, they are taking our money. Canada has 23% sales meaning we're paying them to live in US.
Lets just say this, our government doesn't give a crap out the 98% of us US citizens anymore. They are out there to make money for themselves. Look where our jobs have gone, look where our tax dollars have gone to and now another way to sell off our homes. Tired of this government looking out for themselves. it's become more of Sold Out in the USA..
How many houses do you think are currently for sale in America right now? Last year, 244,000 foreigners bought houses. What percentage is that?
If on the other hand, we had 24 million very wealthy foreigners buy up the homes for sale, then that would create a housing shortage. Sure that would create jobs(which in turn creates a tax base) but in turn, all those foreigners would be using up the same tax dollars that are generated by real estate taxes. (remember that they would not be allowed to work in the country under the Shumer plan).
You seem concerned that your generation might not be able to find jobs thereby enabling you to buy a house when you reach your mid/late 20's. Well... if we bought into this plan, then the investments from foreigners could potentially drive up the cost of housing (in the same way Americans drove up the cost of housing in the late 1990 until 2007), which would also make home ownership unreachable for many in your generation.
The plan is short sighted. The one's who benefit the most are realtors. Secondarily, the home building/repair industry might see an uptick and the politicians who are the sheep of the interest groups would be able to fatten their bank accounts.
Look closely at what America need. We need investments that create jobs. If we could get 244,000 wealthy foreign investors to start businesses that would create 50 jobs each, we would create 12,200,000 jobs and also create additional jobs from the suppliers and business partners of the new businesses.
Lets stick to the 12,200,000 new jobs. Even if they only paid $10. At 40 hours per week, 50 weeks per year, that would create income of roughly 24 billion dollars.. Those new jobs would then create a marginal(8%) income tax revenue of about $1,920,000,000. That would leave each family about $18,400 in earnings (after only Federal Income Taxes) With Social Security deductions, Medicare Deductions etc, each worker may have $14,000 after all deductions. If only 30% of those earnings are spent on taxable goods at a rate of 8% , that would create $1120.00 in additional state sales taxes which fund local services.
Now, if you just sell houses for $500,000 each and collect $4000 in real estate taxes, and maybe collect $1120.00 in sales taxes (because foreigners would be buying local goods while theyre in America), the general fun would lose thhe tax dollars that employment would have created thereby allowing us to secure Social Security medicare, and reduce the $13 trillion deficit.
I would hope that your generation wants to support and benefit from Social Security and Medicare, because if your generation does not want to have any Social Security/medicare when it's time for you retire, then you may not be able to afford a home anyway. You'd have to put in at least 15% of your own income into the Social Security system(currently, you pay 7.5% and your employer pays 7.5% of your pay) and another (although slightly lower amount, check you pay stub for the FICA amount you currently pay) into your future old age medical insurance plan.
Our economy takes several years to really snap back to a prosperous state. Until my generation, which will be the first post ARRA college grad's, really gets rooted into the job market the 30yo+ demographic better jump on board to these types of stimulus. We are America, a 21st century utopia, there is not a place in existence that can rival our good intentions or moral strength. If a filthy rich Asian or Euro wants to be a part of it in my opinion it's their human right. Really, what is the gripe here?
you can take to 500 K and apply for investor visa where you can get a Green card and control of your money
I really don't think that we should offer Visa's to foreigners as an incentive to buy American properties. The first I heard of this practice was when the City of Hollywood Florida decided to build the Jimmy Buffet's Margaritaville on their beach the investors mentioned that they are going to target the Asian market and most of the sales in Florida are of foreigners already. You may be inviting terrorists to come and live amongst us. I don't mean to offend anyone it's just like selling your soul to the devil IMO.
Our country needs to go back to Made In America then we the people will be able to buy and own our land and properties. First we send our jobs to Asia now we are selling them our land! What is wrong with this picture? I remember as a kid the slogan "Look for the Union label when you are buying a housedress or blouse!" also the commercial with the Inspector of American made items checking the products and putting their inspector number on the item. My wish for the next year is that everyone try to buy something Made in America and may the bigwigs Bring the JOBS back to America so we can be the Great Country we should be!
Really, most Americans are welcoming, so a few friendly Canadians at the end of the block that increase your property values isn't a bad thing.
Swell just swell How do these fools think that this will help?
This country problem is not a failing home market .
It is a failing job market they let all our good jobs go to China and helped pack them up for shipment.
Wake up and start taxing the azz off these folks going after Cheap labor in China and sending the products back here to sell
I'm sorry but you should revise your numbers, the number published in March 2011 by your Treasury department state the following:
- 5763 billion of your debt is own by foreigners, 1268 over these 5763 billion are own by Chinese which is 22%. And this is only debt ...
I guess the point I'm trying to make is that you are worried about few hundred houses while USA is 22% owned by China !!
I'm not saying it's better in EU just saying that you're fighting the wrong battle
EDIT: I checked latest numbers and it's 25% today !!
if you have trouble finding a buyer for your 500K house...then lower the price so that an American citizen can buy it - not some wealthy foreigner
don't blame me if you paid too much for the property and are "desperate for prices to rise again"
...it's called the "free market" - deal with it, baby
This is an excellent example of the mentality of politicians and business. Rather than address the problems facing America and its citizens and finding a mutually beneficial solution to the problem, the quick fix is to bypass the issues and causes and just find someone else in the world to sell homes to.
Home values were hyper-inflated before the bubble broke and rather than accept the fact that their values have come down to realistic proportions, politicians want to sell our land to non citizens while American citizens can languish in either total homelessness or marginal homelessness. Our land and neighborhoods are getting sold out from under us to the highest bidder.
What is interesting is that to sell homes to non-citizens does nothing to rectify the issues of rampant unemployment, disenfranchisement of the middle/working class to purchase homes that are more affordably priced by keeping the price higher, and the inability of financial institutions to look long and hard at compromise and deal fairly with a population still reeling from their greedy methods.
This is not American. Come and buy the American Dream, it's for sale.. Why, because our forclosure rate is at an all time high, homelessness is at an all time high & the federal food stamp line is like a giant soup kitchen. Invest in families first, banksters need no be held accountable for this continuing economic nightmare. Wake America we are not in Kansas anymore!
You dont know what you are talking about. The majority of US debt is held by guess who, US Citizens. Thats right look it up, in the form of money owed to Social Security, close to 4 trillion and almost 7 trillion in US bond debt held by US citizens and large banks. Thats 11 trillion right there. In fact, less than 15% of US debt is owed outside its borders.
About Teresa Mears
Teresa Mears is a veteran journalist who has been interested in houses since her father took her to tax auctions to carry the cash at age 10. A former editor of The Miami Herald's Home & Design section, she lives in South Florida where, in addition to writing about real estate, she publishes Miami on the Cheap to help her neighbors adjust to the loss of 60% of their property value.