If a bi-partisan team of U.S. senators has its way, the American economy will see a significant increase in property investment coming from outside its recession-wary borders.
Last month, Senators Charles Schumer, D-N.Y., and Mike Lee, R-Utah, unveiled proposed changes to the country’s VISIT-USA Act, among them a measure to provide renewable three-year resident visas to foreign nationals who invest a minimum of $500,000 in residential real estate anywhere in the U.S.
That residency offer would extend to spouses and dependent children and is geared toward regenerating a housing market that has yet to recover from the 2007/8 housing collapse.
A host of conditions apply: of that half a million dollars in property, at least $250,000 must go toward a primary residence, although dwellings purchased for non-residential use can be rented out; the visa holder must also live in the primary residence for at least 180 days a year and pay U.S. income taxes on foreign earnings; all purchases must be made in cash; and all applicants would be subject to background checks.
That being said, Canadian snowbirds meeting the criteria would see their current six-month cap on stays in the U.S. removed. Proponents in Seattle – now struggling to grow its share of the Chinese investment now going to Vancouver – have also suggested the legislative changes would strengthen the city’s appeal.
That kind of diversion just isn’t going to happen, said Gray, among other successful property investors based in B.C. convinced Vancouver Asian-friendly approach and large community will keep it as the primary real estate market for Chinese investors.
Gray, also a lawyer and author of several other investment books, is just as convinced potential tax implications and the possibility of losing access to Canadian health care will also keep most snowbirds from relocating to the U.S.
“That isn’t going to happen,” he told CRE.
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate
“Even if it did win legislative approval – something that I don’t think will happen – I think it would have a negligible effect on the Canadian market in terms of attracting Chinese and other Asian property investors attracted to Vancouver and other Canadian markets,” Douglas Gray, author of The Canadian Snowbird Guide: Everything You Need to Know about Living Part-Time in the USA and Mexico. “They are coming here instead of the U.S. for social and cultural reasons, and that won’t change.”