New Rule Disclosure for Luxury Buyers in Manhattan

One 57 
157 West 57th Street Manhattan

The Treasury Department will begin identifying and tracking secret buyers of high-end properties beginning today in Manhattan and Miami.

It is the first time the federal government has required real estate companies to disclose names behind cash transactions. Starting today, luxury buyers wanting to pay in cash will no longer be able to hide behind an LLC in Manhattan or Miami-Dade County.

In Manhattan, the initiative requires buyers in sales of more than $3 million to be reported; in Miami-Dade County, it requires reporting on sales of more than $1 million. In Manhattan, 1,045 residential sales cost more than $3 million in the second half of 2015, worth some $6.5 billion in aggregate, according to PropertyShark, a real estate data company.

According to The Financial Crimes Enforcement Network (FinCEN) of the US Treasury "those without bank financing – may be conducted by individuals attempting to hide their assets and identity by purchasing residential properties through limited liability companies or other opaque structures."

In addition to starting in only two markets, the requirement runs from March through August. If the government finds many sales involved with suspicious money they will implement permanent reporting requirements across the country.