When someone mentioned this proposal to me, I thought it was nuts. Selling the right to live in America for $500,000? But then a quick search revealed that the Senate is indeed considering such an idea as part of a larger bipartisan provision of immigration measures (VISIT-USA Act), co-authored by Senators. Charles Schumer (D., N.Y.) and Mike Lee (R., Utah)
The program would create a new homeowner visa that would be renewable every three years. To be eligible, a person would have to buy a primary residence of at least $250,000 and spend a total of $500,000 on residential real estate (i.e. rentals or vacation homes). This proposal is similar to an existing program that puts foreign nationals on a fast track to a green card if they invest at least $500,000 in an American business that creates at least 10 jobs. The homeowner visa proposal though does not lead to a green card and has considerably more restrictions.
Here’s how the program was being justified by the Senators:
“Many people want to come and live in the United States,” said New York’s Republican Senator Charles Schumer, who introduced the legislation yesterday in the Senate along with Utah’s Republican Senator Mike Lee.”They will be here spending money and paying taxes, and the most important thing is they’ll sop up the extra supply of homes we have right now compared to demand, and that’s what’s dragging our economy down.”
“The bill does not limit people from being productive,” Schumer said. “It simply prevents them from coming here and taking jobs that otherwise would go to Americans.”
The idea has some high-profile supporters, including Warren Buffet, who this summer floated the idea of encouraging more “rich immigrants” to buy homes. “If you wanted to change your immigration policy so that you let 500,000 families in but they have to have a significant net worth and everything, you’d solve things very quickly,” Mr. Buffet told the Wall Street Journal.
Before we get too angry with the Senators for considering such a thing, the program does come with a bunch of restrictions that protect current American residents.
- The purchase would have to be in cash, with no mortgage or home equity loan are allowed. And the property would have to be bought for more than its most recent appraised value
- The buyer would have to live in the home for at least 180 days each year, which would require paying US income taxes on any foreign earnings. Buyers would no longer be eligible for the temporary visa if the property were sold.
- The buyer would be able to bring a spouse and minor children to live in the US but would need to apply for a work visa to hold a job. Neither the buyer nor dependents would be eligible to receive Medicaid, Medicare or Social Security benefits.
Your Take? I think the above idea is just a money grab and it is unlikely that many ‘rich” foreign nationals would really partake of the opportunity given the severe restrictions. In particular the prospect of being subject to US taxes without being able to work here would be a major turn-off. But this bill does show how desperate (creative?) the government is getting in trying to solve the housing crisis.