Treasury Department To Track High-End Cash Real Estate Deals In Manhattan
NEW YORK (CBSNewYork/AP) -- In an effort to crack down on money laundering, the U.S. Treasury Department plans to start tracking sales of high-end real estate in two of the country's most expensive markets -- Miami and Manhattan.
As 1010 WINS' Steve Kastenbaum reported, it's no secret that New York is an expensive city. The last average sales price for a home in the last quarter of 2015 was over $1,948,000, according to the real estate firm Douglas Elliman.
The priciest condos and luxury high rises sell for well over $20 million, and some of those prices are driven by foreign buyers who occasionally pay in cash, Kastenbaum reported.
The government said it's concerned that some of these real estate deals are made by corrupt foreign government officials or international criminals who use expensive real estate to launder dirty money. By using holding companies, some buyers may be able to disguise their identities.
So, the department's Financial Crimes Enforcement Network said Wednesday it will temporarily require certain title companies to identify individuals behind companies that buy properties exceeding $3 million with all-cash transactions.
The disclosure requirements would apply for 180 days beginning in March. Under federal law, the government can demand these geographically targeted disclosures for up to six months but can then seek an extension.
Now, the housing industry is trying to gauge the impact of the required disclosures.
"It's painting the high-end segment as having overall treachery, and that's unfortunate,'' said Jonathan Miller, chief executive at the appraiser Miller Samuel. "It's certainly not helpful to the high-end of the market because it adds another level of complication to a transaction.''
Still, Miller said the impact is likely to be minor in the long-term.
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