Schumer says the “homeowners’ visa” bill has a good chance of passing – from cnbc.com:
A new Senate bill would help spur demand in U.S. housing by offering foreign investors a three-year “homeowners visa” if they invest half a million dollars cash and stay in the house for 180 days, co-sponsor Sen. Charles Schumer told CNBC Monday.
“We all know housing is dragging down our economy and the problem is basic supply and demand,” said the New York Democrat.
The bill, co-sponsored with Mike Lee, a Utah Republican, “simply increases the demand. There are literally millions of people around the world, many of them retirees, some not, who would like to live here in America.”
The residency requirement will force these investors to pay federal and property taxes, Schumer pointed out, and is intended to allay immigration concerns.
“We have to straighten out our immigration policy,” Schumer said. “Immigrants are good for America. We should not just have people who cross the border illegally.”
His visa bill is “not a path to citizenship,” he stressed. But those who come using the visa can renew it every three years “as long as they stay in the U.S.”
Sellers will bump their prices accordingly – at least 5-10%.
Will frustrated buyers give in?
His visa bill is “not a path to citizenship,” he stressed — Yes sure 🙂 …
But a path to cictizenship is actually a good thing.
Also on a related note … within this past week house of reps have passed a bill to remove the country-specific limits on Green Cards … This directly favors the immigration from China and India … two countries that were getting impacted by the imposted Caps/limits on the number of immigrants every year.
Looks like folks in “upper echelons” are playing the immigration pawn … It has potential to remedy the housing and other related problems and is much better than any other Govt intervention.
Those Foriegn buyers will be required to pay taxes on thier world wide income to the IRS.
Zero people will take advantage of this offer.
In the video they asked ‘shroom about the tax -he said they’ll tax income made in America only.
“Zero people will take advantage of this offer” … I got atleast 3 from within my offshore-circles, getting all excited and looking forward to it. They are already paying a “bigger tax” to their local govts, red tape, goons and local mafia to have “some” lifestyle and reasonable business/career…
Property prices in Bombay and Delhi are already sky-rocketing … all the craziness with NO power, water, security and infrastructure. They can never afford a SFH in their lifetime in these cities. US is the Promise Land for most of them and places like Southern California are on top-of-the-list only if they can afford.
From the video … “40% of Rich/affluent Chinese will move out of China (given an option)” … may be a similar number qualifies for India as well.
“Sellers will bump their prices accordingly – at least 5-10%.”
For your sake I hope they don’t. It isn’t every day you see someone troll their own blog. Shroomer is an idiot if he thinks this will affect tax revenues in any significant manner.
To avoid world wide tax, one way is to have the wife and the kids become US citizens. The husband who own major income generating assets won’t apply for the immigration visa.
Jim,
To your point about Schumer stating income only made in America, I would be very careful in certain assumptions, because it’s very likely only wordplay.
All income worldwide is up to this point always required to be reported to the US IRS by both resident aliens and citizens. There is no exception at the present time. Changing this would be a big change that I’ve heard nothing about (possible, but unlikely given my profession). Not to mention, hugely unfair to foreign operated corporations who are not allowed to repatriate funds without paying taxes. Notice how there was no discussion of how to fund this 500K of “investment” while avoiding the repatriation taxes.
If you spend more than 180 days in the US (as required for this visa), you are considered a resident alien, and has always required all worldwide income to be reported.
See IRS guidelines, note that there are no exceptions:
http://www.irs.gov/businesses/article/0,,id=180946,00.html
As an aside, most other countries have tax treaties with allowable tax credits (see publication 514 for more details, so in effect you get a credit against US taxes for paying taxes to your local country… however for many it’s actually cheaper to find a way to report and pay taxes in the US if you can because we have pretty good rates. More importantly, passive income is allocatable based on your percentage of time spent in each location. I don’t want to suppose too much, but I’d guess that if you are living here, and you’re earning income without a working visa, that you’ll have a bit of passive income.
To the point about wordplay… an international tax attorney will be very sensitive to not only what WAS said, but what wasn’t said. There was nothing in that discussion that led me to believe any change was happening to the tax code. That would have been bigger news than the discussion about visas, I think.
Also, I find Schumer both xenophobic and elitist. We need all kinds of people to come in, not just the people he likes.
BTW, did you notice at the end that he admitted this would do nothing for construction or low to mid housing? Yay for elitism!
Chuck
Yawn….
It is this kind of political drivel that makes us fence sitters want to cling to the fence a lot longer and harder.
Yes but he is probably wrong about low to mid housing because I think foreigners will be happy to snap up Fannie/Freddie REOs and rent them out.
The requirement is to invest $500,000 cash but with financing it will increase purchasing power to $1.5 to $2 million. Spend a million on a primary residence and pick up 2-4 rentals.
Sellers are always looking for a new justification to bump their price, and yes I hope they don’t – we’ll have a cool spring as everyone wonders when the rich foreigners will start over-paying.
Australia allows foreigners to buy a passport with I believe $1M invested in a business and a minimum of xx number of new hires. No idea how successful it is.
Fed bails out foreign banks/nations. Then gov gives free citizenship to foreigners willing to invest in American real estate.
Is it just me or does it seem like only the bureaucrats and bankers would benefit.
Re #8 recall that this proposal does not give out green cards just renewable visitor visas. So the person is not a permanent resident, just on a renewable visitor visa. As a result since the law treats temporary visitors different than permanent residents it would not trigger world wide taxation.
Are we not smart enough to figure out how to help Americans to buy homes in our country? Many countries won’t let foreigners buy homes in their country, and we want to offer a 2-for-1 deal?
It is good to have immigrants contributing and I am an immigrant but I think it’s still concerning. Housing prices are already high for many of us living here and if it is propped up by wealthy foreign buyers that are not necessarily coming here to provide jobs (which is actually what we need), that is not a good thing.
In addition, we have plenty of people who want to invest that are already US citizens or residents. I am wondering why we don’t get more help as investors that live here already.
If you want to see what foreign investment in real estate can do, have a look at Vancouver BC where there is a large bubble spurred by mostly Asian investment.
Lyle #13
Yes, I know this “new” visa it’s not a greencard. You can already get a greencard with an EB-5 visa while only investing 500K in the US. In my opinion, that’s an area where if people really wanted to come to the US, the path is already there, and the EB-5 program is in my mind more established and easier to understand. However, you have to invest in a business, not just buy a house here.
My point was, there’s no tax evasion once you’re here… any visa where you live here makes you a resident alien, subject to alien resident taxation on your entire income, not just the income you earn “here”.
Personally, I thought Schumer was a wordsmith who gave CNBC the soundbite they needed to sensationalize this, but this is a nothingburger (to steal Jim’s comment).
If you’re hot and heavy to come to the US and have a lot of money, there are already visas that are more permanent designed to do just that.
Chuck
Lyle,
As an aside, there are very specific rules for resident aliens, and I realize now that you must think they would be nonresident aliens with this visa (I highly doubt it)… Here’s the definition:
http://www.irs.gov/taxtopics/tc851.html
Basically, if you wanted to just vacation here, you can get visitor visas for 90 days at a time. Much cheaper than your options above.
Besides, once you spend 31 days a year or more (and cumulative 183 in last 3 years), you become as resident alien, so it’s fairly inclusive.
I have in the past worked in tax, and I’d say after just a cursory review, there are very, very, very few people who maybe could pull off this visa and remain a temporary resident (which would defeat the purpose of having the visa in the first place) AND most likely, the bill requires they visa holder to be considered a permanent resident anyway for tax purposes during the time period of the visa. (I haven’t read the bill, so I don’t know for sure)
Chuck