In these times, double down — on your skills, on your knowledge, on you. Join us Aug. 8-10 at Inman Connect Las Vegas to lean into the shift and learn from the best. Get your ticket now for the best price.
Following its passage through Florida’s Senate and House, Gov. Ron DeSantis signed into law on May 8 Senate Bill 264, which seeks to severely limit real estate ownership by select foreign citizens within the state.
The law is currently set to go into effect on July 1, 2023.
In an announcement from the governor’s office, DeSantis emphasized how much Senate Bill 264 would curb the “malign influence” of China and the “Chinese Communist Party,” but the law will also impact citizens of Russia, Iran, North Korea, Cuba, Venezuela and Syria — whose citizens may actually stand to create a greater impact in turn on the state’s luxury real estate market, agents told Inman.
It’s not all about China
Cara Ameer | Coldwell Banker
“Florida has not really been a hotbed for Chinese buyers, Asian buyers, because of the distance,” Cara Ameer of Coldwell Banker, who is a bicoastal agent in Florida and California, told Inman. “So convenience was always a big reason that they didn’t really go into Florida.”
Traditionally, Ameer said, California has been more of a draw for Chinese buyers because of the direct flights, Pacific climate and good schools.
“This law also affects people in Cuba and Venezuela,” Ameer continued. “Miami has a lot of South Americans — that’s what makes Miami ‘Miami,’ with the culture, and restaurants and different things. So overall, you break this down, okay, we don’t want them to buy agricultural land and things near military bases and all these things … But, I think it’s sending the message that, they’re singling people out that are maybe not welcome in the state.”
The law could dissuade buyers who aren’t impacted by it
The details of the law — that buyers from these countries cannot purchase land over two acres, cannot buy land within five miles of a military installation, and cannot buy agricultural land, among other points — may not even matter to or impact these buyers much in terms of the logistics of them owning real estate in Florida, Ameer argued. Rather, the greater impact will likely come from the sentiment suggested by the law.
“People are not going to take time to read every minutia of this law,” she said. “They’re just going to go, ‘Yeah, we’re not welcome here. Fine, we’ll take our money elsewhere.'”
None of the countries in question make up very much of Florida’s foreign buyer transactions, according to the 2022 Profile of International Residential Real Estate Activity, released by Florida Realtors in April 2023. The only country with somewhat significant foreign buyer representation that will be impacted by the new law is Venezuela, whose foreign buyers make up 4 percent of Florida’s foreign transactions by number of purchases.
The overwhelming majority of foreign buyers in the state come from Canada, which makes up 21 percent of the state’s foreign transactions. After Canada, Colombia (8 percent), Argentina (8 percent), Brazil (6 percent), Peru (4 percent), Germany (4 percent), the U.K. (4 percent) and Venezuela (4 percent) follow in terms of greatest percentage of the state’s foreign buyer transactions.
China on its own is not even mentioned in Florida Realtors’ report, but only referenced to in how many foreign buyers in the state came from Asia and Oceania in 2022, with 7 percent hailing from the region. Nearly half of all foreign buyers in Florida in 2022 were from Latin America and the Caribbean, 18 percent were from Europe, 1 percent from Africa and 8 percent of respondents declined to specify their regional origin.
Chris Pollinger | RE Luxe Leaders
“The short answer is, not significantly,” Chris Pollinger of RE Luxe Leaders told Inman in a text, when asked how much the law might impact Florida’s luxury market.
“Although Chinese wealth is looking to invest, they can still do so in Florida within the guidelines,” he explained. “The wealthy also have ways to hold title through holding companies as well. Same goes for the other named countries, with the Russians having [felt] the weight of sanctions for a bit now.”
Interpretation poses a significant challenge
Howard Elfman at The Agency, who operates across Miami-Dade, Broward and Palm Beach counties, said that his office typically serves a significant portion of luxury foreign buyers, many of whom are Chinese and Venezuelans looking for luxury waterfront condo properties.
Right now, the biggest challenge with the new law is in interpreting all the details, Elfman said. The day he spoke with Inman, Elfman had in fact just stepped out of a meeting between legal experts and real estate professionals who represent the state of Florida in real estate transactions to discuss Senate Bill 264. The greatest confusion thus far was arising from defining a lot of the terms used in the bill, including things like “critical infrastructure facility,” which will now have restrictions on how close to which foreign buyers can purchase real estate.
Howard Elfman | The Agency
“‘Critical infrastructure facility’: That could be a telephone tower (we don’t know where all the communications towers are) the seaport, which is basically the cruise ship port, which would knock out all of South Florida because of where our cruise ships are,” Elfman said, explaining the multitude of definitions the term could potentially encompass.
“There’s still a lot of questions as far as what the qualification may be — [for instance,] you could buy a condo or you could buy a house, as long as it’s not more than two acres — so, there’s still a lot of confusion around the bill.”
A group of Chinese citizens who live and work in Florida are also now suing the state, alleging that the new law is discriminatory, encourages racial biases against Chinese Americans and threatens their financial independence.
“This misguided rationale unfairly equates Chinese people with the actions of their government, and there is no evidence of national security harm resulting from real estate ownership by Chinese people in Florida,” the American Civil Liberties Union of Florida, which is representing the plaintiffs, said in a press release.
Other state governments have introduced more than a dozen pieces of legislation that are similar to the Florida bill over the last few months, but Florida’s would be the first of its kind to be passed into law.
The current lack of clarity around what all the parts of the bill mean is what will most likely have a greater, indirect, impact on the luxury market, Elfman added.
“Indirectly, it’s going to affect [the market,]” he said, “because there’s going to have to be a disclosure if you are going to be somebody that qualifies under this foreign entity. It’s so technical at this point that I’m sure there’s going to be a lot of worries going around that if you’re a foreigner from any of these countries you’re not allowed to buy in Florida, which is not the case. But, when there’s so much confusion behind it, people go to the extreme.”
Get Inman’s Luxury Lens Newsletter delivered right to your inbox. A weekly deep dive into the biggest news in the world of high-end real estate delivered every Friday. Click here to subscribe.
