Paul L. Caron

Thursday, January 14, 2016

NY Times:  Federal Government To Start Tracking Luxury Home Buyers, Beginning In Miami (>$1m), NYC (>$3m)

New York Times, U.S. Will Track Secret Buyers of Luxury Real Estate:

Concerned about illicit money flowing into luxury real estate, the Treasury Department said Wednesday that it would begin identifying and tracking secret buyers of high-end properties.

The initiative will start in two of the nation’s major destinations for global wealth: Manhattan and Miami-Dade County. It will shine a light on the darkest corner of the real estate market: all-cash purchases made by shell companies that often shield purchasers’ identities.

It is the first time the federal government has required real estate companies to disclose names behind cash transactions, and it is likely to send shudders through the real estate industry, which has benefited enormously in recent years from a building boom increasingly dependent on wealthy, secretive buyers.

The initiative is part of a broader federal effort to increase the focus on money laundering in real estate. Treasury and federal law enforcement officials said they were putting greater resources into investigating luxury real estate sales that involve shell companies like limited liability companies, often known as L.L.C.s; partnerships; and other entities.

Future investigations, they said, will focus increasingly on professionals who assist in money laundering, including real estate agents, lawyers, bankers and L.L.C. formation agents.

Officials said the new government efforts were inspired in part by a series last year in The New York Times that examined the rising use of shell companies as foreign buyers increasingly sought safe havens for their money in the United States. The investigation found that real estate professionals, especially in the luxury market, often do not know much about buyers. Until now, none of them have been legally required to. ...

In Manhattan, the initiative requires buyers in sales of more than $3 million to be reported; in Miami-Dade County, it requires reporting on sales of more than $1 million. ...

The Treasury is looking for the actual owners behind shell companies, often referred to as the beneficial owners. “We’re not looking for nominees ...”

(Hat Tip: Bill Turnier.)

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From where in the Constitution does the Federal Government get the authority to do this?

Posted by: Loren | Jan 15, 2016 11:47:16 AM

Spot on

Posted by: bandit | Jan 19, 2016 6:47:48 AM

Way past time to get rid of all rules, laws, regulations, etc about what you can or cannot do with your own money. Eliminate the $10K reporting rules too. The feds use these rules to steal. As if the $10K (should be $100K by now accounting for inflation) reporting was not onerous enough, actually following the law by keeping your transactions under the $10K limit will get you busted for evasion of the limit. Catch the criminals and prosecute them for the actual crimes that they commit, not BS like "money laundering". Another terrible policy brought to you by the war on moonshine and illegal drugs.

Posted by: Art | Jan 15, 2016 2:02:58 PM

you can't launder money in real estate. What you can do is hide assets from the communists who run your country. I don't see why we should care as long as they pay their real estate taxes.

Posted by: Walter Sobchak | Jan 15, 2016 12:35:45 PM

From where in the Constitution does the Federal Government get the authority to do this?

Posted by: Loren | Jan 15, 2016 11:47:16 AM

While I believe that international cash flowing into real estate is exacerbating a bubble, I don't agree that these are "luxury" prices. In parts of these cities a house-sized plot of dirt with a tent on it costs that much.

Posted by: AMT buff | Jan 14, 2016 11:36:12 AM