US residency: yours for $5 million
Making sense of the latest trends in property and economics from around the globe
4 minutes to read
The US might soon begin selling $5-million "gold cards" aimed at wealthy foreign investors that want "green card privileges" and a "route to citizenship", Donald Trump told reporters yesterday.
“Wealthy people will be coming into our country by buying this card. They’ll be wealthy and they’ll be successful, and they’ll be spending a lot of money and paying a lot of taxes and employing a lot of people," Trump said, according to the FT.
While the president might hope that's the case, data from nations with similar schemes suggest residency-by-investment schemes have a mixed impact. The US's existing EB-5 program does link investment to job creation - those that want to take part need to invest $1,050,000, or $800,000 in so-called Targeted Employment Areas, and must create 10 full-time jobs for US workers.
The EB-5 scheme was established by congress, is pretty complex to access and is subject to legislative oversight. On the face of it, the gold card looks to be much simpler: you can pay in cash directly to the government. There is also no direct link to job creation - though that may come later - and Trump says he can implement the scheme without congressional approval.
A dying breed?
With a few exceptions, governments are generally moving away from residency-by-investment schemes. They typically contribute limited amounts to GDP, according to Kristin Surak, author of The Golden Passport: Global Mobility for Millionaires.
Granted, in some countries they account for a chunk of foreign direct investment (FDI). In Latvia and Portugal, golden visa schemes have brought in more than 10% of FDI over time, and in Greece, it tops 7%. However, FDI typically accounts for a small proportion of economic output and governments increasingly think the downsides outweigh the positives, particularly when it comes to high house prices and the potential for fraud.
The UK scrapped its golden visa scheme in 2022, Ireland closed its Immigrant Investor Programme a year later, Portugal scrapped its real estate investment visa around the same time, and the Netherlands axed a similar programme in 2024.
More broadly, policymakers want stricter rules on this kind of mobility - a move that runs counter to much of what we saw during the pandemic. Digital nomad visas, once all the rage, have proved to be increasingly controversial over their impacts on housing costs. We'll have much more on this in The Wealth Report 2025, out next month.
Domestic buyers
Saudi Arabia continues to court overseas investors. In January 2024, the Kingdom announced Premium Residency Visa options which opened the property market to international buyers and investors for the first time. Among the new options is a visa linked to owning real estate worth over SAR 4 million.
Investment has surged. The total number of real estate transactions across all asset classes in Saudi Arabia surged 37% in 2024 to just over 236,690 deals, while the total value of all deals grew by 27% to SAR 267.8bn, according to a new Knight Frank report. Residential market activity, which accounted for 61.5% of all real estate deals by total value, registered a 38% increase in the number of deals.
The government has accompanied investment incentives with a range of policies aimed at boosting homeownership among domestic buyers. The home ownership rate reached 63.7% at the end of 2023, a 16.7 percentage point increase since the National Transformation Plan’s introduction in 2016. The government is targeting a rate of 70%, which would surpass the UK and US, each of which has a rate of about 65%.
Fiscal follies
Donald Trump appears to have unprecedented power to push through his agenda. It's become clear in just a few weeks that neither the Democrats, his fellow Republicans nor US allies have significant sway over the president's strategy. But what about investors?
The Republican-controlled House of Representatives last night narrowly passed Trump's budget blueprint that could come with $4.5 trillion in tax cuts. Just one Republican - a prominent fiscal conservative - voted in opposition. These budgets are non-binding - they signal intent - but the scope of the plans throw doubt on the administrations insistence that it can both cut taxes and cut the deficit meaningfully. The US debt-to-gdp ratio is running somewhere between 100% and 125%, depending on which source you rely on.
UK residents know too well what happens when markets decide to punish fiscal indiscipline. Liz Truss's £45 billion in unfunded tax cuts prompted days of chaos in financial markets and a spike in borrowing costs.
"Several advanced economy governments will run fiscal positions... that test the limits of the bond market’s patience," Neil Shearing, group chief economist at Capital Economics said in December, citing Trump's desire to push through additional tax cuts financed through higher borrowing, irrespective of market concerns about medium-term fiscal sustainability. "We’re assuming that they won’t go beyond this and trigger fiscally induced crises," Shearing added. "This could prove to be wrong."
In other news...
Building safety red tape ‘costs developers £50,000 a week’ (Telegraph).