Chinese citizens, flush with cash now, are beginning to aggressively seek to invest abroad. One of the investments of extreme interest is U.S. residential property. But, they are unsure if it is possible to purchase it. They are always pleased to know that the U.S. places no restrictions on the purchase of residential real estate by foreigners, including Chinese citizens. However, ownership alone does not guarantee entry into the country and some ownership benefits could be denied.
Chinese citizens are likely to be treated differently than U.S. citizens (not by the U.S. or State governments) in one area – financing or mortgaging the home. Banks will typically only lend money to those who have established credit histories which have been created and maintained by U.S. credit agencies. Chinese citizens are unlikely to have this so financing a home through a U.S. bank is nearly impossible.
Another problem Chinese citizens are likely to face is being unable to actually live in the home and possibly not even be able to visit. The Department of Homeland Security (DHS) and the United States Citizen and Immigration Service (USCIS) handle visa and immigration applications as well as examine foreigners who wish to enter the country. Generally, a Chinese citizen who simply owns a residential property in the U.S. and wishes to move into or just visit it, is ineligible to enter the country. There may be possibilities however, and an immigration lawyer would need to be consulted.
One other difference between Chinese citizens and U.S. citizens in the treatment of their status with regard to U.S. residential property is the Homestead Provision. This is the ability to shield the value of a primary residential property from creditors. A home is just like any other asset and as such can be subject to a forced sale for the benefit of creditors (except government, mechanics’ lien, and mortgagees). But most States have shielded the home from such forced sale up to a certain amount. Florida, however, has the most protection – the amount is unlimited.
However, the Florida Homestead Provision only attaches for those who are residents of Florida. So, therefore, a Chinese citizen who does not live in the home does not have this protection.
For a Chinese citizen who wants to buy U.S. real estate – there is good news and bad news. The good news is that there are no restrictions in purchasing a home in the U.S. However, the bad news is that they may not be able to live in it and if not a resident, they will not be able to enjoy the full benefits available.