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Luxury Real-Estate Transactions Under Federal Scrutiny

Luxury Real-Estate Transactions

Digested from “US Will Track Secret Buyers of Luxury Real Estate”
CNBC (1/13/16) Story, Louise

The federal government will begin monitoring all-cash real estate transactions on high-end properties, including apartment communities, for money laundering.

A New York Times series reported that nearly half of U.S. homes valued at more than $5 million are owned by shell companies, with real estate agents potentially knowing very little about the buyers. A closer look by federal officials showed that anonymous shell companies may be purchasing real estate as safe havens for ill-gotten funds.

“We are concerned about the possibility that dirty money is being put into luxury real estate,” Jennifer Shasky Calvery, director of the Financial Crimes Enforcement Network, told CNBC. “We think some of the bigger risk is around the least transparent transactions.”

Two metro areas with significant high-value transactions — New York City and Miami — are placing new requirements on high-dollar deals to better identify buyers. Buyers will need to be reported on transactions of more than $1 million in Miami-Dade County and more than $3 million in Manhattan. Owners have been defined as individuals owning 25 percent or more of the equity interests.

Also, the FBI is creating a new division to focus on money laundering. The division will monitor real estate, among other things. 

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