Fed renews crackdown on cash buyers of luxury real estate

Miami /
Feb.February 23, 2017 12:00 PM

The federal government renewed its geographic targeting order of luxury residential purchases in six major markets, including South Florida, New York and Los Angeles. 

The Treasury Department’s Financial Crimes Enforcement Network targeting order, which was set to expire this week, requires title insurance companies to disclose the true owners of companies that paid all cash for homes priced at $1 million and up in South Florida. The order becomes effective on Friday and will again last 180 days. It has been in effect in Miami-Dade County and Manhattan since March 2016.

In July, FinCEN expanded the tracking of high-end, all-cash luxury home purchased to include Broward and Palm Beach counties, as well as all boroughs of New York City, Los Angeles County, the San Francisco bay area, San Diego County and Bexar County in Texas, which includes San Antonio.

FinCEN said in Thursday’s announcement that in about 30 percent of the deals covered by the order, the buyer has been “subject of a previous suspicious activity report. Critics have said the reporting requirements are an ineffective method for catching money launderers, and the actual impact on luxury sales has been tough to determine in South Florida. Real estate agents have also said that the Panama Papers investigation had more of an effect on the market.

A seminar titled “Avoid the Treasury Trap with Foreign Buyers” held last year at the Miami Association of Realtors showed real estate agents how to help their foreign clients avoid the rules.

The American Land Title Association released a statement following Thursday’s announcement, praising the renewal. “Our members have collected this information for more than a year and the good news is those efforts appear to be beneficial to the government’s work identifying money laundering schemes and the illegal purchase of real estate,” said Michelle Korsmo, ALTA’s chief executive officer.


Related Articles

arrow_forward_ios
(iStock)
South Florida resi construction starts soar in March
South Florida resi construction starts soar in March
Eden Multifamily heads Jay Massirman and Jay Jacobson with Cypress Equity Investments CEO Michael Sorochinsky (rendering courtesy of MSA Architects)
Eden Multifamily, Cypress Equity score $24M construction loan for Tamarac apartments
Eden Multifamily, Cypress Equity score $24M construction loan for Tamarac apartments
(iStock)
Home prices across globe hit records, prompting worries of bubble
Home prices across globe hit records, prompting worries of bubble
Matthias Krull (Linkedin, iStock, US District Court - Sourthern District of Florida/Illustration by Alexis Manrodt for The Real Deal)
Swiss banker’s sentence slashed in alleged $1B Venezuelan money laundering scheme
Swiss banker’s sentence slashed in alleged $1B Venezuelan money laundering scheme
Steven and Beth Millner with One Thousand Ocean (Patrick McMullan/Getty, Google Maps)
Private equity honcho pays $5M for Boca Raton condo
Private equity honcho pays $5M for Boca Raton condo
From left: Jim Cohen, Nancy Corey, Nathan Zeder, Alicia Cervera Lamadrid, Phil Gutman and Mike Pappas (iStock)
South Florida’s pandemic-fueled residential market poised for bull run in 2021
South Florida’s pandemic-fueled residential market poised for bull run in 2021
Kathleen DuRoss Ford and 300 North Lake Way (Getty, Google Maps)
Kate Ford’s Palm Beach estate sells for $55M
Kate Ford’s Palm Beach estate sells for $55M
Oprah Winfrey and (inset) Lawrence Stroll over the unit (Getty)
You get a condo! Billionaire Lawrence Stroll sells Oprah’s former Fisher Island penthouse
You get a condo! Billionaire Lawrence Stroll sells Oprah’s former Fisher Island penthouse
arrow_forward_ios

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

Loading...