An article in the New York Times on Jan. 13, 2016 stated,"U.S. Will Track Secret Buyers of Luxury Real Estate".
It seems that the U.S. government has started a pilot program in an attempt to find the names of buyers of Luxury Real Estate who are trying to remain anonymous.
The focus of the pilot program is Miami-Dade County and New York City. If the program accomplishes its purpose it is expected to go nationwide.
In Miami-Dade County, the focus will be on all cash sales that are more than $1 million. The New York City rule will apply to sales $3 million or higher.
What is the reason for this scrutiny?
It is all about tracking "dirty money". It is believed that criminals are putting their money into real estate.
This effort is a function of the Treasury Department, who is now looking at Shell Companies that buy upscale real estate.
Shell Companies are legal, but they are layering the companies to hide identities. The new rule will require any individual who owns 25% or more to sent their name to the Department.
The rule will require Title Insurance Companies to discover the identities of the buyers and send those names to the Department.
This new ruling will have an affect on Billions of dollars of real estate transactions.
The Times research found that almost half of homes, nationwide, worth at least $5 million are obtained through the use of Shell Companies.
Here is a link to the article for more information:
This will be interesting to follow, especially those Real Estate Agents and Title Insurance Companies that handle Luxury Real Estate.
What impact will this have on the Luxury Market?
It will for sure be interesting to follow.