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There has been a recent flurry of articles, blogs and even televised reports in the U.S. concerning a U.S. Senate bill introduced by Sens. Chuck Schumer (D-NY) and Mike Lee (R-Utah). The bill proposes a number of changes to the immigration rules, most of which are intended to streamline and modernize procedures for obtaining visitor visas. However, there are some measures that are specifically aimed at Canadian snowbirds that are generating considerable controversy.
According to Senator Lee, the objective of the legislation is to provide a "free market method for increasing demand for housing." According to the Wall Street Journal, international home buyers invested approximately USD 82 billion in U.S. housing for the twelve months ended March 31, 2011. According to the National Association of Realtors, Canadians accounted for about 25 percent of non-U.S. home buyers. Not surprisingly, the bulk of purchases occurred in Florida, Arizona, Nevada and California. Hence, the purpose of the Senate bill is to stimulate this already pronounced trend.
The bill offers snowbirds a clear quid pro quo. A Canadian snowbird who satisfies the requirements of the bill would be eligible to stay 240 day per year in the U.S. under a new "snowbird" visa renewable every three years. This contrasts with the 182 days currently allowed under the basic automatic visitor visa for Canadians.
Here are some of the key requirements that would have to be met in order to qualify for the snowbird visa:
In case you are already thinking that this is a pretty high price tag for the visa, please consider these additional factors:
So are there really any snowbirds for whom this plan might actually make sense? Perhaps…the snowbird might sell his or her principal residence in Canada while still clearly a Canadian resident and subsequently use those proceeds, with additional funds if necessary, in order to purchase U.S. real estate worth USD 500,000 or more. This ideal candidate would also have all or virtually all of his or her investments in an RRSP, RIF or other registered plan, all of which the departure tax does not reach since distributions from registered plans paid to non-residents of Canada are subject to Canadian withholding tax. Even for this ideal candidate, suitable health care coverage would still have to be found and the issue of possible U.S. estate tax at the end of the road still looms large. But perhaps some will find those to be an acceptable price to pay for an additional two months of sunshine annually.
It is very difficult these days to forecast the likelihood of Congress passing proposed legislation of any kind and the Lee-Schumer bill is no exception. Moreover, believe it or not, this bill has stirred a good deal of controversy. Apparently some voters perceive the bill to offer "visas for cash," which, in their view, is an immoral, venal perversion of the immigration law. For example, NBC News – San Diego recently ran a report and blog on their website and social media on the bill and asked for feedback using emoticons. Seventy-five percent of respondents indicated that the proposed snowbird bill makes them "furious." One may speculate that this reaction is at least partially an emotional backlash against "rich" foreigners snapping up homes that have become well beyond the reach of so many Americans. Stay tuned!
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