New US rules try to make it harder for criminals to launder money by paying cash for homes
The Treasury Department has issued new regulations aimed at making it harder for criminals to launder money by paying cash for residential real estate
REHOBOTH BEACH, Del. — The Treasury Department has issued regulations aimed at making it harder for criminals to launder money by paying cash for residential real estate.
Under rules finalized Wednesday, investment advisers and real estate professionals will be required to report cash sales of residential real estate sold to legal entities, trusts and shell companies. The requirements won't apply to sales to individuals or purchases involving mortgages or other financing.
The new rules come as part of a Biden administration effort to combat money laundering and the movement of dirty money through the American financial system. All-cash purchases of residential real estate are considered a high risk for money laundering.
The Treasury's Financial Crimes Enforcement Network, also known as FinCEN, will administer the rules.
Money laundering in residential real estate can also drive up housing costs – and rising home prices are one of the big economic issues i n this year’s presidential campaign. A 2019 study on the impact of money laundering on home values in Canada, conducted by a group of Canadian academics, found that money laundering investment in real estate pushed up housing prices in the range of 3.7% to 7.5%.
Under the new rules, the professionals involved in the sale will be required to report the names of the sellers and individuals benefitting from the transaction. They will also have to include details of the property being sold and payments involved, among other information.
Treasury Secretary Janet Yellen said in a news release that the new rules address some
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