Florida Bill Proposes Restricting Chinese, Foreign Investment (2024)
A proposed bill in Florida that would dramatically restrict investment in real estate from Chinese buyers and those from other communist countries could have ripple effects on the rest of the foreign buyer market, experts say.
Florida lawmakers are advancing controversial House Bill 1355, which would ban Chinese nationals from purchasing real estate anywhere in the state. Chinese businesses and people who live in China and aren’t U.S. citizens or residents and who currently own real estate in Florida would not be able to buy additional property after July 1, if the bill becomes law as it is currently written.
They would also have to register their existing ownership of such properties with the state, which some critics have compared to Hitler’s 1938 decree requiring all Jews in Germany and Austria to register their properties.
The amount of Chinese investment in South Florida real estate has dwindled since before the pandemic. But Chinese investors still invest in commercial real estate, such as shopping centers and office buildings, and parents continue to buy condos for their children who attend colleges and universities in South Florida, brokers say.
“As it stands, the Florida bills could make it difficult for families to purchase homes for students studying in Florida,” said Ana Bozovic, founder of real estate data firm and brokerage Analytics Miami. “Is that something we really want to restrict?”
Rep. Katherine Waldron, a Democrat who co-sponsored the bill, said it would likely be changed to carve out Chinese students, the Miami Herald reported. Waldron said, “We’re not trying to cause anybody harm who lives here.”
The bill would also ban foreign nationals from Russia, Iran, North Korea, Cuba, Venezuela and Syria from purchasing agricultural land in the state. And it would ban foreigners from those countries from buying land within 20 miles of a U.S. military installation or critical infrastructure facility.
“I understand restricting farmland for purposes of national security, but I think we are on a potentially slippery slope of defining anything and anyone Chinese as potentially insidious,” Bozovic said.
Lawmakers across the country have sounded the alarm on foreign influence over agricultural production and national security in the U.S., but a Forbes article published in March states that 18 other countries own more agricultural land nationwide than China.
In Florida, foreign nationals own about 6 percent of all private agricultural land, according to the state’s analysis of HB 1355. The analysis, published on Wednesday evening, said that the bill could have a major impact on property ownership because it would allow the state to “seize and sell illegally owned property.”
It’s important to note that the proposed law would likely not have an effect on foreign investors participating in the federal EB-5 real estate investment program, unlike what other publications have reported.
“The proposed bill should not have any effect on the EB-5 program, since the EB-5 investor invests in an entity that usually makes a loan to a business or project, which may or may not be real estate,” said attorney Ronnie Fieldstone, a partner at Saul Ewing in Miami.
Craig Studnicky, CEO of the brokerages ISG World and Related ISG, agrees with the restrictions on land purchases near military installations and infrastructure facilities, but said the ban on all real estate deals for Chinese investors is going “too far” and “highly discriminatory.”
Several years ago, brokers were known to send real estate agents to China to sell South Florida condo developments — Studnicky’s ISG included. The brokerage partnered with a Chinese group in 2015 to court Chinese buyers, even adding a Mandarin-speaking member to its staff.
But that effort from South Florida brokers died down, and even major development sites purchased by China City Construction in Brickell and Miami Beach have since been sold.
Only seven properties in Miami-Dade County are owned by people or entities with Chinese mailing addresses, according to The Real Deal’s analysis of property appraiser information. That’s just a small fraction of the properties entirely or partially owned by Chinese investors. Many foreign investors will typically create a company in the U.S. and use that company to buy real estate, with a U.S. mailing address.
Chinese buyers accounted for 6 percent of all foreign U.S. residential real estate purchases from April 2021 to March 2022, according to the National Association of Realtors. Buyers from China, Hong Kong and Taiwan spent $6.1 billion on those deals.
Jason Damm, an assistant professor at the University of Miami’s business school, doesn’t think the restrictions would affect the real estate market. Latin Americans make up the majority of foreign investors in Miami real estate.
“It would be difficult to imagine it’s going to make a huge dent in our market,” Damm said. “It’s more of a political statement than anything.”
Daniel Ettedgui, owner of Miami Beach-based lender and mortgage brokerage firm Financial Triangle, flew to Tallahassee on Wednesday to speak out against the proposed legislation, drawing parallels to Nazi Germany and calling the bill racist.
Ettedgui, who moved from France more than 30 years ago, expects the proposed law would send a message to people from other Asian countries to avoid investing in Florida real estate, and it could also discourage European investment.
“If you do that today with the Chinese, what’s next?” he said. “History is repeating itself.”
Senate Bill 264, which Gov. Ron DeSantis signed into law earlier this month, prohibits nearly all Chinese citizens and businesses based in China from purchasing real estate in Florida.
Because China is a socialist country, all land is either subject to government ownership or collective ownership. In principle, municipal land is subject to government ownership and land outside cities is subject to collective ownership. However, one can obtain the right to use the land.
Florida bill restricting foreign real estate purchases a “slippery slope,” brokers say. A proposed bill in Florida that would dramatically restrict investment in real estate from Chinese buyers and those from other communist countries could have ripple effects on the rest of the foreign buyer market, experts say.
So, can foreigners buy property in China? The answer is yes, foreigners are allowed to purchase property in China! The essential requirement is that you have studied or worked in China for at least one year on a residence permit. Foreigners are allowed to only own one residential property for dwelling purposes.
The law is set to take affect July 1. It will be a felony for Chinese people to buy property in restricted areas or for any person or real estate company to knowingly sell to restricted people. For the other targeted nations, the penalty is a misdemeanor for buyers and sellers.
Buying a Property in Florida Will Not Automatically Get You a Visa. U.S. Law does not preclude foreign nationals from buying real estate in the country. Instead, any foreign national can buy real estate without any involvement of a government agency, as long as they abide by the law.
Chinese investors are among the top foreign purchasers of residential real estate, along with Canadians, according to the National Association of Realtors. Other states have had concerns over foreign ownership of land and have made efforts to regulate it.
First, it forbade the immigration of new Chinese laborers for a period of 10 years. It also required all Chinese subjects who were already in the country, regardless of their occupation, to obtain a certificate of identification if they planned to leave the U.S. and return at a later date.
Highlights: Foreign Investment US Real Estate Statistics
From April 2020 to March 2021, investors from outside the United States bought 107,000 properties worth $54.4 billion in the United States. Foreign-born individuals make up 14.25 percent of the population in the country's 50 largest metros, on average.
The sale of Florida real estate by a foreign owner is subject to tax on the capital gain (profit made on the sale of the real estate). To ensure that this tax is paid by a foreign owner who may have severed his only connection to the U.S. by way of this sale, FIRPTA requires a withholding tax apply at the time of sale.
The bill requires each institution of higher education (IHE) to semiannually report any gift or gifts received from a foreign source with a value of $50,000 or more. An IHE must make its report to the Board of Governors or State Board of Education, as applicable.
Florida has mutual recognition with 10 states: Alabama, Arkansas, Connecticut, Georgia, Illinois, Kentucky, Mississippi, Nebraska, Rhode Island and West Virginia.
CAPAC Chair Statement on Florida Law Banning Chinese Nationals from Purchasing Land, Need for Federal Legislation. WASHINGTON, D.C. — On May 8, 2023, Governor Ron DeSantis signed Florida Senate Bill 264 into law.
There are two major methods for foreigners to inherit the estate located in China, namely notarization and litigation. In the event that there is no dispute between successors over the estate, you may bring relevant documents for succession notarization at a Chinese notary public.
“Owning” might not be the right term, as in China, property is simply leased for the duration of 70 years. After this time, the lease is usually renewed. However, the Ministry of Housing and Construction can theoretically nullify your lease at any time if your property is needed for development.
In play now in China, where around 70% of household wealth is in property, this phenomenon is weighing on the post-pandemic recovery of household consumption, which Chinese policymakers have vowed to make a more prominent driver of economic growth.
The Chinese company JOINN Biologics has purchased 1,400 acres of land and plans to build a massive facility to receive and quarantine newly imported monkeys, effectively establishing the county as another point along the dangerous and deadly wildlife-trade chain.
Largest AAPI ethnic groups in Florida include: Indian (185,991), Filipino (151,376), Chinese (125,469), Vietnamese (82,048), Korean (42,579) and Japanese (27,599).
You do not need to be a resident of Florida to buy a house here, nor do you even need to be physically located in the state of Florida. It is totally possible to shop for houses in Florida remotely online and then have a local realtor in Florida go out in person and help you with the deal.
Yes, Florida is considered to be a good state for real estate investment. The state has relatively low taxes and a large population with strong rental demand.
According to the U.S. Department of Agriculture's (USDA) latest report on foreign ownership of American land, from 2021, 146 Chinese investors held 383,935 acres—nearly double the 193,700 acres that comprise New York City.
Chinese buyers comprise one of the largest groups of foreign buyers of residential property in the United States. Historically, between 20,000 and 40,000 residential properties were bought by Chinese nationals, but in 2022, both the sales volume and percentage of all foreign-bought properties declined.
China's real estate market has slumped in the last two years after Beijing cracked down on developers' high reliance on debt for growth. BEIJING — China needs to do more in order to fix its real estate problems, the International Monetary Fund said Friday.
The Chinese Exclusion Act was repealed by the 1943 Magnuson Act when China had become an ally of the U.S. against Japan in World War II, as the U.S. needed to embody an image of fairness and justice.
An estimate published in 2018 counted 600,000 people of other nations living in China, with 12% of those from the US; that means approximately 72,000 Americans living in China.
In a study of USDA reports, Pew found the foreign country that owns the most U.S. land is not China or Russia, but rather, our neighbors north: Canada. Investors from the Great White North, according to the USDA, own about 12.8 million acres of U.S. land, most of it forest land.
The 2022 Land Report 100, compiled each year by The Land Report magazine, released its annual list of landowners who own the most acres in the United States. The nation's largest private landowners are the Emmerson family in California who own over 2.4 million acres.
That means any gain from selling your primary residence overseas is usually tax-free, as long as you meet the occupancy requirements and your gain is below these thresholds: $500,000 – if you're married filing jointly. $250,000 – if you use any other filing status.
The US Government does not refund Sales Tax to Visitors
US Customs and Border Protection has clarified on the CBP website that says, “The United States Government does not refund sales tax to foreign visitors. Sales tax charged in the United States is paid to individual states, not the Federal government …”.
There is no state capital gains tax in Florida, as the state has no state income tax at all. This applies even if you live out of state and own a summer home in Florida. But you are still subject to federal capital gains taxes when you sell your property.
2023-33, Laws of Florida, would limit select persons from "foreign countries of concern" from directly or indirectly owning, having a controlling interest in or acquiring by purchase, grant, devise or descent any interest in any additional real property in Florida on or after July 1, 2023.
(a) “Foreign country of concern” means the People's Republic of China, the Russian Federation, the Islamic Republic of Iran, the Democratic People's Republic of Korea, the Republic of Cuba, the Venezuelan regime of Nicolás Maduro, or the Syrian Arab Republic, including any agency of or any other entity under ...
Florida officials must choose between jobs or office with new law. The law prohibits public officials from working as lobbyists while holding public office and for six years after they leave office. MIAMI — A new Florida law is forcing some public officials to choose between their day jobs or holding office.
Of all states, Colorado and Texas come on top as the hardest in terms of granting a real estate license. Each of the states requires some education and a test, which you must pass before being issued with a real estate license.
Due to recent changes to New York State Real Property law increasing the educational requirements to obtain a real estate salesperson or broker license, New York no longer has reciprocity with any other state.
Gov. Ron DeSantis signed it into law and it is set to go into effect on July 1. It bars Chinese citizens who are not United States citizens from purchasing homes in Florida, with few exceptions. It imposes similar but less stringent restrictions on citizens of Cuba, Venezuela, Syria, Iran, Russia and North Korea.
DeSantis called the latest measure a response to a "concerted effort" by the Chinese Communist Party to acquire farmland in Florida. He referenced an incident where a Chinese-owned drug developer tried to buy 1,400 acres in Levy County for $5.5 million in late 2022.
There is no private “freehold” land ownership in China. All urban land in China is owned by the Chinese government and is commonly referred to as “state-owned land.” All rural and suburban land is owned by rural collectives (ie, local groups of farmers) and is commonly referred to as “collective land.”
How have Chinese and Canadian investments developed over time? The share of Chinese investors in the U.S. real estate market remained somewhat constant until 2018 when it hovered at around 15 percent, before dropping to 11 percent in 2019 and then six percent in 2021.
Chinese investors are among the top foreign purchasers of residential real estate, along with Canadians, according to the National Association of Realtors. Other states have had concerns over foreign ownership of land and have made efforts to regulate it.
Can you inherit debt in China? In general, heirs in China are not responsible for the debts of the deceased. However, there are some exceptions to this rule. If the deceased had outstanding debts, the creditors may attempt to collect those debts from the estate of the deceased.
The China 5 years tax rule requires foreign nationals who have resided in China for more than five full consecutive years to be treated as Chinese tax liabilities.
How Does the Healthcare System Work in China? China does have free public healthcare which is under the country's social insurance plan. The healthcare system provides basic coverage for the majority of the native population and, in most cases, expats as well. However, it will depend on the region you reside in.
The average price of a new house in China increased 4.1 per cent on an annual basis to 10,588 yuan (US$1533) per square metre in the first two months of 2023, the first rise in 11 months, according to data released by the National Bureau of Statistics of China on Wednesday.
FIRPTA is a section of the federal tax code that deals with foreign real estate investment income. This act is an anti-deferral law that requires foreign persons to pay tax on gains from sales of U.S. real property interests (meaning businesses or partnerships) within ten days of selling.
Although not subject to FIRPTA, buyers and closing agents are responsible for withholding it and may be held liable for it by the IRS. It is imperative that FIRPTA is addressed before the deal is closed in order to avoid any potential issues.
In 1995, the Department of Revenue adopted a rule, approved by the Governor and Cabinet, directing property appraisers to raise the assessed value of a qualifying homestead property by the maximum of 3% or the Consumer Price Index, whichever is less, on all properties assessed at less than full market value (just value ...
What are the Actual Rates of Withholding ? The IRS requires 15% of the sales price be withheld on the sale of United States real property interests by foreign persons (on sales above $1,000,000), and either 15% or 10% on sales between $300,001 and $1,000,0000, and either 15% or $0 for sales of $300,000 and under.
Lack of Restrictions Imposed by the United States Government
Therefore, international buyers are not subject to any additional taxes or regulations. The rights to purchase and own property in the United States is the same for a foreign investor as they are for a United States citizen.
When someone owns property and makes it his or her permanent residence or the permanent residence of his or her dependent, the property owner may be eligible to receive a homestead exemption that would decrease the property's taxable value by as much as $50,000.
Foreign direct investment (FDI) takes place when a company, multinational corporation or individual from one country invests in another country's assets or takes an ownership stake in its companies.
If you plan to purchase property from a foreign person or corporation and want to avoid FIRPTA withholding taxes, you can apply for a withholding certificate from the IRS. The IRS only grants withholding certificates in certain situations, and applying for a certificate does not guarantee you will be granted one.
50% Rule: Simplistically, if the buyer, at the time of sale, has plans to reside at the property, more than it will be rented out, over each of the following two 12-month periods, the sale is potentially eligible for the exemption.
A seller may be exempt from FIRPTA if one or more of these circ*mstances apply: The sales price is less than $300,000 and the buyer (or a family member) has definite plans to reside in the home for at least 50% of the first 24 months of ownership.
A vacancy or suspension in the office of county commissioner shall be defined and filled as provided by law. A vacancy created by recall shall be filled as provided in section 5.2 of this Charter.
This amendment "restores the voting rights of Floridians with felony convictions after they complete all terms of their sentence including parole or probation. The amendment does not apply to those convicted of murder or sexual offenses."
A physician certification may only be provided after the physician has conducted a physical examination and a full assessment of the medical history of the patient.
Yes, the Withholding Certificate allows you to get an early refund (around closing time) of your FIRPTA withholding, but you still need to file a tax return to report the actual sale. Generally, you can file a tax return as early as late January of the following year.
A prudent broker will have a list of CPAs or attorneys who are familiar with FIRPTA to provide to a seller with a foreign status. The CPA or attorney can guide the seller and advise them regarding their tax obligations under this law.
Yes. Regardless of where you live, the IRS can file a lien against your assets regardless if the assets are located in the US or in a foreign country. Just as long as you own the assets, they are subject to levy.
Introduction: My name is Stevie Stamm, I am a colorful, sparkling, splendid, vast, open, hilarious, tender person who loves writing and wants to share my knowledge and understanding with you.
We notice you're using an ad blocker
Without advertising income, we can't keep making this site awesome for you.
