New Rule Aims to Expose Dirty Money in U.S. Real Estate, US

A new rule proposed by the U.S. Treasury’s financial crimes unit aims to crack down on money laundering in the residential real estate sector. The rule, introduced by the Financial Crimes Enforcement Network (FinCEN), targets individuals who use ill-gotten cash to anonymously purchase properties through trusts and other secretive legal entities. These cash transactions have long been favored by criminals as they provide a way to avoid scrutiny from banks and financial institutions. The proposed rule would require certain real estate professionals to report these high-risk transactions to FinCEN, similar to the suspicious activity reports filed by financial institutions. The information on the beneficial owners of these entities would be stored in a non-public database accessible to law enforcement and national security agencies. The move is seen as a necessary step to counter dirty money in the U.S. real estate market, which is valued at $47 trillion. The market’s stability makes it attractive to criminals and unscrupulous foreign investors, leading to inflated property prices and limited supply for genuine buyers. The draft rule is currently open to public comments for a period of 60 days.