More or Less Foreign Money to come to USA?

[XBoxBoy]

It seems that in the most recent year end budget bill, congress repealed the Foreign Investment in Real Property Tax Act. From what I understand the old law would tax foreigners on their capital gains when they would sell real estate they owned. Now they won’t have to pay capital gains taxes when they sell their properties.

Here’s an article on the change:

http://www.bloomberg.com/news/articles/2015-12-18/u-s-poised-to-lift-35-year-old-real-estate-tax-on-foreigners

While this article claims this will trigger a boom in foreign investors buying commercial real estate in the USA, I’m wondering if they are also overlooking the desire of foreigners to sell currently held property and take the profits tax free before congress reverses the law again.

Also wondering if this predicted boom in commercial real estate will also trigger a bigger flood of foreign cash into high end properties here in San Diego.

Thoughts?

[spdrun]

No effect — I think most foreign buyers are buying to hold, not to flip. Some might sell as a result, some might buy, but the effects will cancel.

[The-Shoveler]

I was listening to the radio yesterday and heard they passed or extended a invest 500K in a biz and get a path to citizenship bill, I think that will have a much larger effect.

Comparing the complete package I still think SoCal is in the bargain bin of World RE.

[XBoxBoy]

Here’s another weird piece to add to the whole foreign cash question…

http://www.worldpropertyjournal.com/real-estate-news/united-states/miami-real-estate-news/cash-home-sales-data-corelogic-cash-buyers-cash-sales-all-cash-homebuyer-report-2016-reo-sales-miami-cash-sales-data-miami-real-estate-news-9573.php

According to CoreLogic the percent of homes purchased with all cash is falling. That might be as simple as US investors have been on a spending spree with all the foreclosures. But also it brings into question if the amount of foreign cash coming into the market is actually increasing.

There’s also a chart at the end of this article that shows California all cash purchases at 23% which is one of the lowest percentages in the country. (Looks like Washington DC is the only place lower)

All this hype about cash buyers makes me wonder if cash from foreign buyers hasn’t peaked.

[poorgradstudent]

I imagine it will have the greatest impact on Miami.

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