24 | NAR VIEWPOINT WORDS | Cindy Fauth
BUSINESS
www.opp.org.uk | DECEMBER 2011
US gets its Act together T
wo U.S. Senators, Charles Schumer (New York) and Michael Lee (Utah) have introduced a bill, commonly known as the VISIT-USA Act, to amend the Immigration and Nationality Act and the U.S. visa process, in further efforts to stimulate tourism and housing in the United States According to the sponsors, the bill
would remove the bureaucratic red tape that stifl es travel and investment in the U.S. For instance, the bill would reduce barriers for Canadian and Chinese visitors whose consumer spending provides a lift to the U.S. economy. The bill would also expedite priority visa applicants, introduce a pilot programme to test video conferencing as a means for screening foreign nationals, and make changes to the current visa waiver programme. But what does all this mean for foreign buyers purchasing U.S. real estate? Schumer and Lee are sponsoring this bill with the intent of luring wealthy foreign investors by offering resident visas. The bill offers some general visa reforms, and also creates two real estate-related visas: Section 5 of the bill creates a Canadian retiree visa that would allow Canadians older than 50 years - of age who own a U.S. home, or have a signed lease for the time of their proposed stay - to obtain a non-immigrant resident visa. The visa would allow the retiree, their spouse and minor children to spend up to 240 days a year, which need not be consecutive days, living in the USA.
Section 8 creates a non-immigrant visa for those individuals who expend at least $500,000 making a cash- purchase of a personal residence in the United States. This visa would allow the
individual, their spouse and minor children to live in the U.S.; the bill does require the visa holder to spend
at least 180 days in the states. (Note: The purchase must include either a principal residence worth $500,000 or a principal residence worth $250,000 and other rental housing stock which together with the principal residence total at least $500,000. The housing units could be either existing units or new construction.)
“This concept has the potential to lift
“It could help clean up some of the U.S. housing markets property inventory”
demand for the nation’s excess homes. Our housing market will never begin a true recovery as long as our housing stock so greatly exceeds demand,” Senator Schumer said. “This is not a cure-all, but it could be part of the solution to the housing crisis and won’t cost the government a nickel.” According to Senator Lee, “The purpose of this bill 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 programmes have failed to work. I am sponsoring this bill because I know that it makes economic sense while protecting American citizens.” There is no path to citizenship in
the bill for either visa (though any minor children born in the U.S. to families who hold either type of visa would automatically be U.S. citizens). Also, while home purchases associated with the Canadian retiree visa can be fi nanced with a mortgage, purchases made under the $500,000 visa must be paid in cash (no fi nancing options allowed). Additional restrictions and requirements are:
1. Neither residency visa will allow Problem-solving | The Bill, if passed, could alleviate America’s housing surplus
the visa holder to work in the United States. A separate work visa will need to be obtained in order to lawfully obtain employment. 2. The holder of either residency visa will not be eligible for Social Security, Medicare, Medicaid, or any other U.S. Federal Benefi ts.
3. Both visa holders will have to pass criminal/nationality background checks and will be required to renew the visa every three years. 4. The $500,000 resident holder will be required to reside at their residence at least 180 days out of year, making their foreign income eligible to be taxed by the Internal Revenue Service. While formally introduced as S. 1746, the Bill leaves a number of questions concerning the mechanics of the new visas unanswered. Most notably, it is unclear what types of housing units will meet the Bill’s requirement for both the Canadian and the $500,000 visa. Likewise, it is unclear whether the rental agreements or the purchase of the properties would need to be completed prior to the issuance of the visas. As such, the introduced bill is likely to undergo additional changes in the coming
And if enacted, proponents argue, it could help propel the U.S. housing market in a positive direction by cleaning up some of the property inventory.
The National Association of Realtors has not taken a formal position on the Visit-USA Act as of yet, but the Association will continue to analyse the Bill’s provisions and work with the Bill’s sponsors to address the issues that remain to be articulated.
Foreign buyers purchased $82 billion in U.S. residential real estate last year. And that number could increase, if the “Visa Improvements to Stimulate International Tourism to the United States of America Act” (VISIT- USA Act) becomes law in the United States. Cindy Fauth of the National Association of Realtors reports.
months. Proponents of the bill, such as the U.S. Chamber of Commerce, agree that it will help stimulate the U.S. economy. The U.S. Chamber applauded the Act in a recent press release, stating, “For too long, we have created barriers, and too many hoops and hurdles, which act to deter visitors from other countries coming to the United States to spend their money and create jobs. This is a loss we can ill afford in today’s economy. We can address these barriers and still protect the security of the United States.”
While not without its restrictions, the Bill has the potential to loosen some of the limitations that foreign investors face when seeking property purchases in the United States.
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