In some cities, most cash sales will have to be reported to regulators
Perhaps common knowledge to those that purchase with cash, buyers moving to Florida after the sale of their home in Northern and Western states may encounter these regulatory measures. The changes mean the identities of buyers of almost all-cash purchases in some counties will have to be reported to the Treasury’s Financial Crimes Enforcement Network (FinCEN).
Identifying cash buyers of luxury real estate has helped ferret out illicit activity so well that the U.S. Treasury Department is expanding previous regulations to more U.S. counties and lowering the sales price threshold for reporting.
In January 2016, in an effort to combat money laundering, FinCEN announced title insurance companies would be required to identify the human beings behind any cash-paying “shell companies” that buy high-end residential real estate in New York City and Miami at or above certain million-dollar price points.
Other “geographic targeting orders” (GTOs) put out by the department have expanded the list of affected markets and price points since then and earlier this month, the department issued its most widespread order yet. The order is effective Nov. 17, 2018, through May 15, 2019.
Now, title insurance providers in these areas are required to disclose the people behind any buyer companies for any all-cash transactions of residential real estate at or above $300,000:
- The Florida counties of Miami-Dade, Broward and Palm Beach are a few noted;
Given that the median sales price of a home in many of these counties is well above $300,000, that means virtually all cash purchases of homes in those areas will have to be reported to FinCEN.
Resources Inman News Nov. 27 by Staff Writer Jim Dalrymple.