There is a new rule ready to be implemented and all anonymous real estate investors must be alarmed.
It appears that the new rule requires all the real estate investors to be identified. In a previous investigation, they found out that there is growing number of high-end real estate properties with anonymous buyers.
The Treasury Department was alarmed by this issue, and announced a new initiative which will require all title insurance companies to must be able to identify their cash buyers of luxury properties.
Manhattan and Miami
Manhattan and Miami are the two locations with a lot of purchases in luxury homes. They hold the most number of anonymous real estate investors.
It is said that buyers can buy properties even when they are hiding their identities. The issue escalated quickly, and now they are put under the radar.
These anonymous real estate investors can prevent their names to be put to the address. The new rule will apply to cash purchases in Manhattan and Miami as their companies shell out not less than $3 million and $1 million respectively.
The purpose of the new rule
The main purpose of the new rule is to prevent money laundering. The rule is said to be the most effective solution to control the number of anonymous real estate investors. It stated and proved by the Treasury Department’s Financial Crimes Enforcement Network.
FinCen has already sent their concerns about the all-cash purchases. They also warned those who do not have bank financing, as it may be conducted by several people hiding their assets and identity.
Who are these buyers?
Most real estate investors were said to be high profile celebrities and businessmen. Unlike their prediction, it turned out that notable people purchase the real estate properties, and not the foreigners who visit the mentioned locations. The methodology was found more about safety and privacy reasons.
The rule will start on March 1st, and will be out in effect for 180 days to give time for all companies and real estate investors to follow the rule.