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VISIT-USA Explained

Newly-proposed legislation that would grant resident visas to international buyers who spend at least $500,000 in cash on residential properties in the U.S. is one of the most intriguing ideas we’ve heard to help shore-up the nation’s hardest hit housing markets. The concept is part of a broader immigration package aimed at boosting foreign travel and investment in the U.S.

The bill, entitled The Visa Improvements to Stimulate International Tourism to the United States of America Act (or VISIT-USA Act), shows early signs of bi-partisan support; with it’s co-sponsors, Senators Mike Lee (R-Utah) and Charles Schumer (D-N.Y.), representing each side of the political spectrum.

We know from experience that foreign buyers—particularly from Canada and Great Britain—have a strong propensity for purchasing vacation homes in Southwest Florida.  Basically, the only thing preventing more of them from cashing-in on today’s reduced home prices are the restriction that typically reduces their annual stay in the U.S to the equivalent of six months—usually in 90 day increments.  This bill bets that by removing this restriction baby boomers from around the world will join their U.S counterparts in retiring to Florida—with much of their accumulated wealth in tow.

The legislation proposes a three-year residential visa for foreign nationals who invest no less than $500,000 in residential real estate in the U.S.  A minimum of $250,000 must be spent on a primary residence where the visa holder is required to reside for at least 180 days each year while faithfully paying U.S. taxes.  The balance—or more—can be spent on other residential properties, which can be rented out.  Moreover, buyers must pay in cash; thus placing no additional burden on our already stressed-out financial system.

Applicants will remain subject to the rigorous criminal and national security background checks that have been significantly enhanced in our post-9/11 world. Those with criminal records, suspected ties to terrorist organizations or drug cartels and other troublesome activities will be barred from qualifying.  Once approved, applicants will not be eligible for such government benefits as Medicare, Medicaid, and Social Security.  Essentially, the legislation creates an extended travel visa that will last for three years at a time, be subject to a strict renewal process; and not allow its recipients to obtain an American job or enter the path to citizenship.

Several of the bill’s tenets are specifically written to smooth the way for Canadian buyers. Presently, Canadians without a visa are not permitted to remain in the United States for more than 180 days annually, though many would undoubtedly retire here year-round if they could legally do so.  Thus far in 2011, 25% of all international buyers in the U.S. came from Canada. That percentage is even greater in Florida where 39% of this year’s international home buyers have been Canadian—up 3% from last year.

The VISIT-USA Act doesn’t venture into unfamiliar territory hoping to create a market that doesn’t already exist. For the 12 months ending in March, sales to foreign buyers totaled $82 billion, up from $66 billion in 2010, according to the National Association of REALTORS®.

For Southwest Florida, where a real estate recovery has already taken hold in the lower price ranges, this legislation exactly targets the segment of our market that remains stubbornly weak:  Homes priced from $500,000.  Above that, there’s no spending limit.

“This is a way to create more demand without costing the federal government a nickel,” said Senator Schumer.  “Our housing market will never begin a true recovery as long as our housing stock so greatly exceeds demand. This is not a cure-all, but it could be part of the solution.”

Its purpose, adds Senator Lee, is “to support a free market method of 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.”   With the pundits agreeing that the speed of our overall economic recovery truly hinges on the pace of housing’s recovery, that’s a sentiment that people of every political and economic persuasion can get behind.  Unless the bill ends up larded with too many pork barrel earmarks, we see very little downside to this legislation and look forward to tracking its progress through Congress

  • User Gravatar Laura Veitia
    October 28th, 2011

    Great post – Thanks for the insight!

  • User Gravatar Roy Culligan
    October 30th, 2011

    This sounds VERY interesting. Is there an official website that contains further details – and giving an indication as to when such legislation could come into play or if this would affect only new purchases (and not be retrospective if a property had already been bought)?

  • User Gravatar Olivia Allder
    October 30th, 2011

    It’s a great idea! As an English snowbird currently owning a property in Florida it would make our travel much easier … but … some questions:
    a. as I already own a property would this count in value towards the required $500,000 minimum? (If not, this would be very unfair).
    b. This proposed legislation has been widely reported in the UK papers but it states that the visa is for a lifetime, not 3 years and then renewable! Therefore, anyone thinking of buying a property would hold off until everything is clarified. If it takes as long/painstakingly difficult to obtain this visa as it does for our current B2 which is a 6 month visa (and other visas) then a lot of people would be put off.
    This is not a new idea … a lot of other countries already do this e.g. Australia and Malaya (which is for 10 years).
    Would you please keep me informed as to the progress of this proposed legislation as it would not be an obstacle to us.
    Many thanks.

  • User Gravatar Joshua Kimura
    October 31st, 2011

    We will be monitoring all news and information regarding the VISIT-USA Act. Feel free to follow us on twitter and our blog.

  • User Gravatar Martin
    November 1st, 2011

    A couple of thoughts here. I think the assumption that Canadians are simply going to flock here upon passage of this bill is wishful thinking at best. There are many factors currently in place that would make this unlikely. At the top of the list is that Canadians want to return home in the warmer months just like their American counterparts from northern states. I saw no mention of tax implications in the explanation of this bill and probably the most important factor would be health care. Are the people pushing this bill aware that a Canadian resident must reside in the country for a minimum number of days within a calendar year to maintain their coverage? That number varies between provinces but is somewhere between 150-185 days. In addition, you may have to maintain your primary place of residence in the province which provides your health care (ie. Ontario).

    some things to think about.

  • User Gravatar Michael Saunders & Company
    November 2nd, 2011

    As this proposed legislation is still in its drafting stage and working its way through various congressional committees, its hard to say how the final piece of legislation, if approved, will read.

    In the meantime, we strongly encourage you to contact the bill’s sponsors, Senators Schumer and Lee, as well as Florida’s Senators Nelson and Rubio to make your thoughts on the subject known.

    Below is a link for each senator that enables you to contact them:

    Senator Schumer: http://www.schumer.senate.gov/Contact/contact_chuck.cfm

    Senator Lee: http://www.lee.senate.gov/public/index.cfm/contact

    Senator Nelson: http://www.billnelson.senate.gov/contact/index.cfm

    Senator Rubio: http://www.rubio.senate.gov/public/index.cfm/contact

    To read the full text of the VISIT-USA Act you can visit the following link for the Library of Congress:
    http://www.gpo.gov/fdsys/pkg/BILLS-112s1746is/pdf/BILLS-112s1746is.pdf

    Many thanks for sharing your thoughts and concerns!

  • User Gravatar Judy Mansfield
    November 10th, 2011

    Any initiative to re-energize the real estate market and thus the economy has to be welcomed, and ‘outside the box’ situations demand ‘outside the box’ thinking.

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