Bill Overview
Title: American Property Act
Description: This bill imposes an excise tax on foreign persons who own any specified under-utilized residential real property for more than one-half of any taxable year. The amount of such tax is 1% of the estimated value of such property. The bill defines specified under-utilized residential real property as any specified residential property located in the United States that is occupied as a dwelling unit for less than 180 days during the taxable year. Specified residential property means a single-family home or structure consisting of four residential units or less, or a part of a building that is a semi-detached house, rowhouse unit, residential condominium unit or other similar premises that is, or is intended to be, a separate parcel or other division of real property, and includes any land that was conveyed with such home, structure, or building.
Sponsors: Rep. Jacobs, Chris [R-NY-27]
Target Audience
Population: foreign persons owning under-utilized residential properties in the U.S.
Estimated Size: 50000
- The bill targets foreign persons who own residential properties in the United States.
- Properties affected are those under-utilized, meaning occupied for less than 180 days a year.
- The definition of 'specified residential property' includes single-family homes, small multi-unit structures, semi-detached houses, rowhouses, and residential condos.
- This bill could potentially influence foreign investment decisions in the U.S. real estate market.
Reasoning
- The policy primarily affects foreign owners of under-utilized properties, thus directly impacting those foreign owners, potentially leading them to sell or better utilize these properties.
- Indirect effects include changes in property values and community stability, which can affect residents in neighborhoods with high concentrations of foreign-owned properties.
- The real estate market might experience changes in demand dynamics, influencing real estate agents, property managers, and local contractors.
- Considering the potential target population and budget, the policy might not cover all under-utilized properties, especially in high-density urban areas where such ownership is more common.
- The policy might also impact housing availability over time if properties become more effectively utilized or placed on the market.
Simulated Interviews
real estate agent (San Francisco, CA)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 12/20
Statement of Opinion:
- The policy might reduce demand from foreign investors causing property values to stabilize.
- I think this might encourage local ownership, but could affect my commissions initially.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
property manager (Miami, FL)
Age: 38 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- This policy will make my job harder as foreign owners may sell properties.
- It could lead to fewer contracts in the short-term but might stabilize the neighborhood.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 4 |
| Year 20 | 7 | 4 |
retired investment banker (New York, NY)
Age: 60 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- I would rather sell my under-utilized condo to avoid this tax.
- I suppose this might increase local housing availability.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 7 | 8 |
| Year 5 | 7 | 9 |
| Year 10 | 7 | 9 |
| Year 20 | 8 | 9 |
small business owner (Phoenix, AZ)
Age: 29 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 15/20
Statement of Opinion:
- The policy might result in more housing availability and stable rents.
- Lower property values could make buying a home more feasible for me.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 8 | 6 |
real estate investor (Los Angeles, CA)
Age: 55 | Gender: other
Wellbeing Before Policy: 9
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- This could present opportunities to buy properties as foreign owners sell off unprofitable assets.
- Long-term, the market might stabilize but immediate impacts are uncertain.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 10 | 9 |
| Year 20 | 10 | 9 |
software developer (Austin, TX)
Age: 34 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 18/20
Statement of Opinion:
- If this policy encourages better community dynamics, I'm in favor.
- Temporary market fluctuations might be stressful, but stability is good.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 5 |
| Year 20 | 9 | 5 |
university professor (Boston, MA)
Age: 47 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 15.0 years
Commonness: 6/20
Statement of Opinion:
- The policy seems to tackle inefficiencies in the housing market caused by absentee ownership.
- Urban communities could see improvements in social cohesion.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
retired engineer (Chicago, IL)
Age: 65 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- This policy complicates my retirement planning as my property usage is affected.
- It might prompt me to restructure or sell my property.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
urban planner (Seattle, WA)
Age: 50 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 20.0 years
Commonness: 9/20
Statement of Opinion:
- This could lead to positive changes in community utilization of spaces.
- Economic volatility in the housing market is a potential risk.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
graduate student (Dallas, TX)
Age: 26 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 16/20
Statement of Opinion:
- The policy might indirectly lead to more affordable housing in my area.
- If international students face more housing availability, it would ease off-campus living constraints.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 6 |
| Year 20 | 9 | 6 |
Cost Estimates
Year 1: $50000000 (Low: $30000000, High: $70000000)
Year 2: $51000000 (Low: $30600000, High: $71400000)
Year 3: $52020000 (Low: $31212000, High: $72828000)
Year 5: $54080000 (Low: $32448000, High: $75712000)
Year 10: $58320000 (Low: $34992000, High: $81568000)
Year 100: $140020000 (Low: $84012000, High: $196028000)
Key Considerations
- Accurate identification of foreign-owned properties may be challenging and require significant administrative effort.
- The potential deterrent effect on foreign investment in residential real estate should be monitored.
- Local real estate markets may undergo changes if the occupancy rates increase due to the tax.