Monday, October 24, 2011
(graphic: Huffington Post)
Lawmakers in Washington think one way to help stimulate the depressed housing market is to make it more appealing for wealthy foreigners to buy American homes.
Senators Charles Schumer (D- New York) and Mike Lee (R-Utah) have introduced legislation that would give residence visas, renewable every three years, to foreigners who spend at least $500,000 to buy houses in the U.S.
Schumer and Lee point to housing markets in South Florida, Southern California, Arizona and other regions as evidence that the wealthy in other countries are interested in investing in U.S. properties.
The National Association of Realtors says international buyers contributed $82 billion to U.S. residential real-estate sales for the year ending in March, up from $66 billion during the prior year.
Sandra Miller, a broker at Engel & Volkers in Santa Monica, an international real estate firm that caters to foreign clients, told The Los Angeles Times that about 10% of the luxury market now is composed of foreign investors. Miller believes offering visas as incentives could triple that figure.
The Senate legislation does include conditions that foreign buyers will have to meet. These include making home buys in cash (no mortgages or home equity loans) and requiring that the property is purchased for more than its most recent appraised value.
Also, buyers would have to live in the house for at least six months each year, which would force them to pay U.S. income taxes on any foreign earnings. And buyers would lose their eligibility for temporary visas if they sell the property.
-Noel Brinkerhoff
Bill Would Encourage Foreigners to Buy U.S. Homes (by Jim Puzzanghera and Lauren Beale, Los Angeles Times)
Foreigners' Sweetener: Buy House, Get a Visa (by Nick Timiraos, Wall Street Journal)
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