Foreign Retirees Could Benefit From Immigration Bill

By Jude Joffe-Block
May 21, 2013

Canadian couple Cécile Bastin and Sylvain Coté, stand with their realtor, Arnold Porter (left), as they shop for real estate in Phoenix.

PHOENIX -- Let's call it the snowbird provision.

Buried in more than 800 pages of the immigration reform legislation currently under debate is a proposal that would allow Canadians to visit second homes in the U.S. for up to eight months at a time.

It’s one of two proposals in the bill aimed at boosting foreign retirements here.

Canadian snowbirds and real estate investors have already made their mark in Phoenix.

They flocked to Phoenix in recent years when home prices plummeted and there was a glut of homes on the market. Canadians lead the pack of foreign buyers here, by far.

They bought more than 15,000 homes since 2009, according to Information Market, a firm that analyzes real estate data.

While Canadian buying has slowed from its peak in 2011, buyers keep coming from up north. Cécile Bastin, 49, and Sylvain Coté, 50, came to town last week from Windsor, Ontario in search of a winter vacation property in Phoenix.

“Some place where we can easily access,” Bastin said. “And we can just put our feet up, enjoy the weather, eat outside, and say, ‘Oh, they are under 10 feet of snow up there in Canada!’”

Bastin and Coté still work in Canada, but anticipate longer visits to their future winter home once they eventually retire.

Tucked into the Senate immigration bill are two provisions to give foreigners like Bastin and Coté even more flexibility for spending time in the US when they hit the age of 55.

One allows Canadians who own or rent property here to visit for eight months at a time, up from the current six-month maximum.

Another grants foreigners from any country three-year, renewable visas if they invest half a million dollars of cash in real estate, as long as they come with their own health insurance.

Neither provision allows beneficiaries to work in the U.S.

Canadian John Ryan, who is a part-time Arizonan, particularly likes the idea of retiree visas for property owners.

We reached Ryan by phone at his primary residence in British Columbia, but he also owns a home and four rental properties in Phoenix. He’s just a few years shy of the 55-year age requirement.

“It would allow me to enjoy the property in the U.S. much more than I currently do,” Ryan said.

Ryan said the proposed retiree visa could be a boon to the local Phoenix economy, in that it would encourage even more fellow Canadians to winter in the U.S.

“Canadians will be down purchasing retirement homes, and everything that goes along with that, furniture, food meals, restaurants, entertainment,” Ryan said.

Sen. Chuck Schumer (D-NY) first introduced a proposal for something similar to the retiree visa in 2011, at a time when the housing market was overrun with vacant homes.

Back in 2011, he explained that proposal on CNBC, which was aimed at foreign property owners.

“There are loads of people who would like to live here.,” Schumer said. “Loads of people. This is a way of letting them live here and helping us solve our housing crisis.”

Schumer is now a member of the Gang of Eight senators who drafted the comprehensive immigration reform bill. He also backs allowing Canadian snowbirds eight-month visits.

One of the main champions of that provision is the Canadian Snowbird Association, a Toronto-based group that represents 70,000 traveling Canadians, and has registered lobbyists in Washington, D.C.

Evan Rachkovsky, a research officer with the association, said his organization worked closely with Schumer’s office to get the provision included in the bill.

But in addition to the current six-month immigration limits on visits, there are a number of factors that limit Canadian visits to the U.S.

For one, foreign visitors can’t avoid U.S. income taxes if they are present in the U.S. more than 182 days — about six months — in a calendar year.

Furthermore, many Canadian provinces require that residents live in Canada for at least six months out of the year in order to receive Canadian health insurance.

The Canadian Snowbird Association is lobbying on both sides of the border to address both issues.

The group is asking Canadian provinces to allow Canadians who live abroad for up to eight months the chance to retain their health insurance.

On the American side, the association is pushing for Canadians to be exempted from paying American income tax if they stay in the U.S. for eight months.

“We have spoken with U.S. lawmakers on that point specifically,” Rachovsky said. “And they have given us all the assurances that any sort of tax implications would be dealt with before the passage of the bill.”

So far, Canadian snowbirds aren’t the only foreign group singled out for special privileges in the massive Senate immigration bill, either. The proposed legislation also has deals for Irish and South Korean workers as well.

“In terms of the political and policy discussion, many of these things are flying under the radar,” said Ron Hira, a public policy professor at the Rochester Institute of Technology.

“It is almost like stealth immigration policy.” Hira said, in reference to the country-specific worker provisions. “Where you have got these smaller bits, or what seem to be smaller bits, and individually they seem maybe not to have a major impact, but collectively they would have a significant impact.”

Both retiree provisions were probably included in the legislation because they promise potential economic benefits.

Michael Orr, a real estate expert at Arizona State University's W.P. Carey School of Business, said encouraging foreign real estate sales may not be needed in places like Phoenix at the moment.

“Canadians did a great job of buying homes when no one else was very interested, and we are very grateful for that,” Orr said. “But now everybody’s active in the market.”

Real estate agents are complaining they don’t have enough homes to show prospective buyers, Orr said.

“There just aren’t enough homes to go around," he said.

Creating immigration incentives for foreign buyers could make the housing market even more competitive.