To curb, control money laundering in real estate transactions.
By Sreekanth A Nair
The US Treasury Department announced on Wednesday that the Financial Crimes Enforcement Network (FinCEN), will monitor and track all-cash, high-end real estate deals to curb the flow of illicit money.
The action will be implemented in Manhattan, New York, and Miami-Dade County, Florida, for a period of six months.
“The Financial Crimes Enforcement Network (FinCEN) today issued Geographic Targeting Orders (GTO) that will temporarily require certain U.S. title insurance companies to identify the natural persons behind companies used to pay “all cash” for high-end residential real estate in the Borough of Manhattan in New York City, New York, and MiamiDade County, Florida,” the Treasury Department said in a statement.
The department suspects that the deals without bank financing may be done by individuals to hide their assets and identity by purchasing residential properties through limited liability companies or other opaque structures. Transactions done by shell companies will also come under the order.
The New York Times had found in an investigation that almost half of homes worth at least $5 million are purchased using shell companies nationwide.
To identify the real owners, FinCEN will ask certain title insurance companies to identify and report the true beneficial owner behind a legal entity that purchases high-end residential assets in Manhattan and Miami-Dade County.
The Federal Government is asking real estate companies to disclose the details of property owners for the first time. The move is considered as ns effort to control money laundering in real estate.
The order will be in effect from March 1, 2016, to August 27, 2016.
1 Comment
Australia has forced sales of foreign-owned real estate (buyers mostly from China)properties, after they had breached ownership laws, that restrict to newly built houses. The Chinese buyers were driving up house prices.
The same thing is happening in San Francisco, NY and other metro areas. Most of the transactions are made in cash and there is much money laundering going on.
FinCEN, should enforce this in all major cities.