Written by attorney Mary Carmen Remigio Madrid-Crost

Visa Options for Foreign Real Estate Buyers

The Connection

There is a synergy between professionals in the fields of immigration law and real estate. Realtors can be in a better position to strategically expand their market as they inform potential real estate buyers of visa options they may qualify for through the help of licensed, reliable and knowledgeable immigration professionals.

Foreign buyers are not prohibited from purchasing real estate in the United States. However, they must obtain the proper documentation required for financing and to enable them to hold title as well as fulfill other obligations of owning real estate such as paying taxes. Certain lenders can work with a tax identification number (TIN). Others may need a social security number, which is issued only when one is authorized to work in the United States. If keeping the property as a primary residence is a condition to the property purchase, the foreign buyer must have the appropriate visa to remain legally in the United States. Below are various scenarios that foreign buyers can relate to and the visa solutions pertinent to each situation:

Scenario 1

Philippe is a French national who has acquired a great deal of wealth by buying and selling real estate all over the world except in the United States. Now he wants to try the real estate market in the US. What kinds of immigration issues should he be prepared for before purchasing real estate in the US? If he decides to “flip" houses, can he sell the homes to US residents? Can he sell the homes to foreign nationals?

First of all, Philippe must define his objectives and answer a few questions. Does he plan on investing as an individual? If so, he must first ply for a tax identification number? If he decides to be an investor pursuant to an E-2 treaty investor visa, he will be able to apply for a social security number. Or, would he prefer to form a corporation to purchase the investment property? In this case, the corporate federal employer identification number can be used for purposes of purchasing the investment property.

When he purchases real estate, Philippe must travel to the U.S. for the closing transaction. Philippe, being a French national, may enter on a Visa Waiver Program or a B-1 visa for business visitors. Physical presence in the U.S., however, is not a condition for ownership of real estate. However, if he plans to stay or come back on a more permanent basis, he must apply for a visa to allow him to stay. If he decides to work or pursue any business objectives, he must do so legally by obtaining a work visa, employment authorization document or an immigration status consistent with his goals.

If Philippe’s purchase of real estate is part of a plan to pursue a business in the United States, he may qualify for an E-2 visa if his investment does not quite meet the requirements for the EB-5 green card process. The E-2 visa requires the existence of a treaty of friendship, commerce and navigation or a bilateral investment treaty between the United States and France, and Philippe must be willing to put a substantial sum of money at risk as he directs a business which generates more than marginal revenue. Also, the E-2 entity formed must be owned by a majority of individuals with the same citizenship.

With respect to the question whether Philippe could sell his property to Americans or foreign nationals, the answer is yes. If Philippe realizes income out of the sale, he is required to pay capital gains tax and he must have either a tax identification number, social security number, or, a federal identification number if the property is under a business entity owned by Philippe.

Scenario 2

Marlena can purchase a home and occupy it until she is done with her medical residency. She can continue to own the property and rent it out to other residents even after she returns to her home country to practice medicine. There are obligations of property ownership, including paying real estate taxes and making sure the property is insured, so she must abide by these obligations. And, if she realizes income from renting out her property, she must pay taxes on such income.

Should Marlena find a need to travel back and forth to inspect her property, she can come in for a period no longer than 90 days under the Visa Waiver Program, if she is a citizen of a country that participates in the program. Alternatively, she can come in on a B1/B2 visa as a visitor. If she is admitted as a B-1 business visitor, she is authorized to stay for the amount of time she needs to carry out her business. If she states that she plans to visit for pleasure (and plans to inspect her property while visiting for pleasure), she may be admitted on a B-2 status and granted up to six months of authorized stay.

J-1 visa holders who come to the United States to pursue medical training are required to exit the United States for two years, after their medical training, unless they are able to obtain a waiver of this two-year rule. The process of obtaining the waiver is quite complicated, requiring voluminous documentation, including a study of demographics, users of Medicaid, and letters of recommendation from influential politicians, but it can be done. So, if Lisa changes her mind and later decides to practice medicine in the United States, she can pursue either of the following avenues: (a) wait for two years in her home country and, through the sponsorship of an employer, come back with an H-1B visa to practice medicine while working on her application to become a permanent resident, or (b) file a timely application for a waiver of the two-year foreign residence rule; once the waiver is approved, an employer can sponsor her and file an H-1B petition so that she can practice medicine without having to exit the United States. Eventually, she can apply for permanent residence as long as the conditions of e waiver (continuously working in the medically underserved are for the requisite number of years) are met.

Since Marlena is entrepreneurial, she may just decide to put up her own medical practice (assuming she meets all the credentialing and licensing requirements). She may qualify for an E-2 treaty investor’s visa if she comes from a country with reciprocal treaty with the United States. As long as she invests a substantial sum of money needed to operate a medical practice and puts the money at risk to realize more than a marginal income, and she enters to direct the medical practice, she may successfully obtain an E-2 visa. If she is still in the United States when she plans to pursue this avenue, she can immediately apply for an E-2 status without having to fulfill the two-year residence requirement for J-1 visa holders. However, when she decides to apply for the green card (through the sponsorship of an employer or marriage to a U.S. citizen), she must seek a waiver of the two-year foreign residence requirement.

Alternatively, if Marlena has outstanding achievements for which she received awards and recognition, she may qualify for the O-1 status. She does not need to obtain a waiver of the two-year residence rule before switching to an O-1 status.

Additional resources provided by the author Illinois Assciation of Realtors

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