NYC lifts “veil of secrecy,” requires shell companies to reveal names of members

More than half of last year's condo- and co-op sales were to LLCs

New York /
Jul.July 21, 2015 08:30 AM

Thanks to new disclosure requirements by the city, anonymously buying luxury property through shell companies is going to be a much trickier endeavor.

Under the new rules, the names of the members of shell companies that are buying and selling real estate have to be released to the city, according to the New York Times. The changes to the policy aim to remove “a veil of secrecy” that surrounds sales of luxury real estate, City finance commissioner Jacques Jiha told the newspaper.

An investigation that focused on the Related Companies’ Time Warner Center by the newspaper in February, which reported on the increased use of limited liability companies when it comes to buying property, spurred the city to make the change.

The goal of the increased transparency is to find those property owners who could be avoiding paying city income taxes by saying they legally reside outside of New York City, the newspaper reported. Roughly 89,000 condos and co-ops are owned by people whose primary residence is outside of the city.

“I think it’s an unfair, inappropriate position for the Department of Finance to say to people who invest in real estate, ‘Gotcha,'” Jay Neveloff, an attorney and a member of REBNY, told the newspaper. “There’s no doubt there are bad people who buy real estate with money they’ve gotten from criminal activities. It’s got to be a tiny minority.”

More than half of last year’s condo sales for $5 million or more were to limited liability companies. The new rules went into effect in May. [NYT]Claire Moses 

 

Related Articles

arrow_forward_ios
Here are the week’s top luxury sales
Here are the week’s top luxury sales
Here are the week’s top luxury sales
Clockwise from left: John D. Rockefeller, Izzy Englander, Steven Mnuchin, David Koch, Jacqueline Bouvier, and William Zeckendorf (Credit: Getty Images and StreetEasy)
For 15 years, David Koch lived at the world’s “richest building”
For 15 years, David Koch lived at the world’s “richest building”
Here are the week’s top luxury sales
Here are the week’s top luxury sales
Here are the week’s top luxury sales
This Brooklyn Heights home went into contract at $2,184 per square foot. (Compass)
$14M house topped Brooklyn’s luxury listings last week
$14M house topped Brooklyn’s luxury listings last week
Douglas Elliman chairman Howard Lorber, Corcoran CEO Pam Liebman and 53 West 53rd. (Giles Ashford, Getty)
Elliman takes over marketing at MoMA tower
Elliman takes over marketing at MoMA tower
1 Grand Army Plz #12C (Compass, Google Maps)
Brooklyn’s luxury market cooled last week
Brooklyn’s luxury market cooled last week
Alchemy Properties president Ken Horn and The Pinnacle at the Woolworth Building (Alchemy, iStock)
Woolworth Building’s $79M “pinnacle” returns in challenging market
Woolworth Building’s $79M “pinnacle” returns in challenging market
It’s the first time in the past four quarters that sales have exceeded year levels.
“We are recovering”: Manhattan home sales finally increase
“We are recovering”: Manhattan home sales finally increase
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...